Chapter 2—Production Possibilities Frontier Framework

Subject: General Questions / General General Questions
Question
113. Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is

a.

1 unit of Y.

b.

2 units of Y.

c.

1/2 unit of Y.

d.

1/4 unit of Y.

e.

none of the above

114. Keisha can produce the following combinations of X and Y: 100X and 20Y, 50X and 30Y, or 0X and 40Y. The opportunity cost of one unit of Y for Keisha is

a.

5 units of X.

b.

0.2 units of X.

c.

3 units of X.

d.

1/2 unit of X.

e.

none of the above

115. Michael can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. Vernon can produce the following combinations of X and Y: 100X and 20Y, 50X and 30Y, or 0X and 40Y. It follows that

a.

Michael has the comparative advantage in producing X and Vernon has the comparative advantage in producing Y.

b.

Michael has the comparative advantage in producing Y and Vernon has the comparative advantage in producing X.

c.

Neither Michael nor Vernon has a comparative advantage in producing X.

d.

Neither Michael nor Vernon has a comparative advantage in producing Y.

e.

There is not enough information to answer the question.

116. A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person.

a.

higher

b.

increasing

c.

lower

d.

equal

117. Between 1910 and today, the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century.

a.

dropped; technological improvements

b.

rose; technological improvements

c.

dropped; technological declines

d.

rose; technological declines

118. Suppose Andrea is taking just two courses and is at a point on her PPF of grades for those two courses. Now this PPF shifts inward and Andrea moves to a point on the new PPF. Then it is impossible for

a.

both of her grades to fall.

b.

both of her grades to rise.

c.

one of her grades to rise and the other grade to fall.

d.

one of her grades to fall while the other grade stays constant.

119. Suppose Andrea is taking just two courses and is at a point inside her PPF of grades for those two courses. If Andrea changes her work habits then it is impossible for

a.

either one of her grades to rise.

b.

both of her grades to rise.

c.

both of her grades to fall.

d.

either one of her grades to rise while the other grade remains constant.

e.

none of the above is impossible in this situation

120. The PPF between goods X and Y will be a downward-sloping

a.

straight line if increasing opportunity costs exist.

b.

straight line if decreasing opportunity costs exist.

c.

curve that is bowed inward if increasing opportunity costs exist.

d.

straight line if constant opportunity costs exist.

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