question
Refer to the diagram to the right. Point B is...
answer
Technically efficient
question
The points outside the production possibilities frontier are...
answer
Unattainable
question
The _________ demonstrates the roles played by households and firms in the market system.
answer
Circular flow model
question
Refer to the diagram to the right. Point A is...
answer
Inefficient in that not all resources are being used
question
Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in the figure above represent his production possibilities frontier?
answer
Graph A
question
Refer to the diagram to the right which shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?
answer
75 pounds of meat
question
Refer to the table to the right. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 26 pizzas and 30 calzones would appear...
answer
Outside Tomaso's production possibilities frontier
question
Suppose there is no unemployment in the economy and society decides that it wants more of one good. Which of the following statements is true?
answer
It will have to give up production and consumption of some other good
question
Which of the following is not a factor of production?
answer
$1,000 in cash
question
The attainable production points on a production possibility curve are...
answer
The points along and inside the production possibility frontier
question
If the best surgeon in town is also the best at cleaning swimming pools, then according to economic reasoning, this person should...
answer
Specialize in being a surgeon because its opportunity cost is lower
question
If the production possibilities frontier is _________, then opportunity costs are constant as more of one good is produced.
answer
Linear
question
The resource income earned by those who supply __________ is called wages.
answer
Labor
question
Refer to the table to the right. Assume Tomaso's Trattoria only produces pizzas and calzones. Tomas faces __________ opportunity costs in the production of pizzas and calzones.
answer
Constant
question
Bella can produce either a combination of 60 silk roses and 80 silk leaves or a combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and 80 silk leaves, which is the opportunity cost of producing an additional 10 silk roses?
answer
25 silk leaves
question
The figure to the right shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
answer
1 1/3 pounds of vegetables
question
The production possibilities frontier model shows that...
answer
if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good
question
The primary purpose of _________ is to encourage the expenditure of funds on research and development to create new products.
answer
Patents and copyrights
question
Refer to the table to the right. Assume Tomaso's Trattoria only produces pizza and calzones. A combination of 24 pizzas and 30 calzones would appear...
answer
Along Tomaso's production possibilities frontier.
question
An outward shift of a nation's production possibilities frontier represents
answer
Economic growth
question
If the economy is currently producing at point W, what is the opportunity cost of moving to point X?
answer
5 million tons of paper
question
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. Which of the following statements is true?
answer
Haley has a comparative advantage in making bracelets and Serena in making necklaces
question
Adam Smith;s invisible hand refers to...
answer
The process by which individuals acting in their own self-interest bring about a market outcome that benefits society as a whole
question
Comparative advantage means the ability to produce a good or service...
answer
At a lower opportunity cost than any other producer
question
The table above shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena;s opportunity cost of making a bracelet?
answer
2 necklaces
question
A production possibilities frontier with a bowed outward shape indicates...
answer
Increasing opportunity costs as more and more of one good is produced
question
Refer to the diagram to the right. Point C is...
answer
Unattainable with current resources
question
All of the following are critical functions of the government in facilitating the operation of a market economy except...
answer
Ensuring and equal distribution of income to all citizens
question
Refer to the diagram to the right which shows the production possibilities frontier for Mendonca, and agrarian nation that produces two goods, meat and vegetables. The linear production possibilities frontier in the figure indicates that...
answer
The tradeoff between meat and vegetables is constant
question
If the economy is currently producing at Point Y, what is the opportunity cost of moving to point W?
answer
Zero
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