Eu02L2
1
Capital is _________________.
any good with a long life
the goods that can be used to produce other goods and services
a special resource that organizes the other resources
the money that firms have to spend
2
Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides without producing fewer boat rides. Harry is ___________________his production possibility frontier.
producing on
moving along
producing inside
producing outside
3
Production efficiency occurs when production _______________________.
of more of any good requires producing less of some other good
is at any attainable point
is on the production possibility frontier or inside it
is specialized
4
The figure shows Roger's production possibility frontier. Point
a
is an ___________________ point and production is ___________________.
unattainable; efficient
attainable; inefficient
unattainable; inefficient
attainable; efficient
5
Vicky currently produces at point
a
in the figure. If Vicky moves from point
a
to point
b
, her opportunity cost of a modem _______________________.
remains the same
increases
decreases
is zero
6
A country produces only pencils and erasers. Pencil production is efficient if the marginal _____________ of a pencil equals the marginal _________ of ___________.
cost; benefit; an eraser
cost; cost; an eraser
benefit; benefit; an eraser
benefit; cost; a pencil
7
When economic growth occurs, the
production possibility frontier shifts inward
production possibility frontier shifts outward
economy moves along its production possibility frontier
opportunity cost of all goods decreases
8
In an hour, Andy can make either 6 pizzas or 12 pies and Chris can make either 6 pizzas or 18 pies. _____________________________advantage in making pizzas.
Chris has a comparative
Chris has an absolute
Andy has a comparative
Andy has an absolute
9
Anna and Maria produce shirts and ties. The figure shows Anna's
PPF
and Maria's
PPF
. Anna and Maria can reap the gains from trade if Anna produces _______ and Maria produces __________.
shirts; ties
ties; shirts
shirts and ties; only ties
only ties; shirts and ties
10
Big Lobster sells lobster and fish, and so too does H Salt. If Big Lobster's opportunity cost of preparing lobster exceeds H Salt's opportunity cost, then all the following are true except ____________.
H Salt has a comparative advantage in lobster
Big Lobster has a comparative advantage in lobster
they will both gain if Big Lobster sells fish and H Salt sells lobster
H Salt doesn't have a comparative advantage in cooking fish
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