Economics Principles and Applications 6th Edition Hall

Economics Principles and Applications 6th Edition HallWhen opportunity costs rise as more of a good is consumed, the production possibilities frontier will be concave (bowed out) with respect to the origin. a. True b. FalseBy better utilizing existing resources, an economy can produce at a point outside of its current production possibilities frontier. a. True b. FalseThe production possibilities frontier is useful for demonstrating both scarcity and productive inefficiency. a. True b. FalseAn economy's production possibilities frontier is fixed in the long run. a. True b. FalseIf capital is not being used efficiently, an economy cannot be operating at a point along its production possibilities frontier. a. True b. FalseFigure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b?Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point b to point a?Figure 2-1 illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. If this student does not study at all, how much income can they earn? a. $0 b. $40 c. $80 d. $100Production possibilities frontiers are typically concave (bowed out) from the origin because a. of the law of supply b. there is usually a one-for-one trade-off in resources used in production c. economies of scale enable firms to reduce the average costs of production as output rises d. the opportunity cost of a good rises as the quantity of the good produced increases e. resources are often left idle in the firmCombinations of goods on the production possibilities frontier a. are unattainable without additional resources b. can be produced using currently available resources and technology c. reflect minimum normative value allocations d. will meet society's needs but not its wants e. are attainable only through international tradeCombinations of goods outside the production possibilities curve a. are unattainable given society's technology and resources b. are combinations that have already been consumed c. go beyond basic necessities d. result from involuntary unemployment e. are the result of economic recessions. If the economy is producing a combination of goods inside its production possibilities frontier, then a. workers are on vacation b. a significant number of workers have little education c. some resources are being wasted d. technology must improve before output can increase e. the opportunity cost of producing more output is greater than the value of the additional output that could be producedAssume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-2 represents the production possibility frontier for beef and wheat. Between points F and G, the opportunity cost increasing wheat by two bushels equalsAssume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-2 represents the production possibility frontier for beef and wheat. Production at point H isAssume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-2 represents the production possibility frontier for beef and wheat. What is assumed constant as the economy moves from point F to point G?Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. Figure 2-2 represents the production possibility frontier for beef and wheat. The opportunity cost of moving from point G to point F equalsThe production possibilities frontier illustrates a. the combinations of goods that could be produced with resources and technology constant b. how technology influences opportunity costs c. the law of diminishing returns d. how price changes affect decision making of individuals e. the law of demandWhen there is an improvement in technology, holding all else constant, a. the production possibilities frontier will shift inward b. society faces larger opportunity costs from shifting productive resources from one use to another c. goods and services will increase in price d. the economy must have some idle resources e. the production possibilities frontier will shift outwardWhich of the following could lead to an inward shift of the production possibilities frontier? a. an increase in the cost of one good b. an increase in the utilization of resources c. a rise in the level of technology d. a law is passed whereby a mandatory retirement age of 60 is imposed e. a decrease in the utilization of resourcesFigure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. The opportunity cost of moving from point B to C isFigure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. At which point would the plant be under-utilizing its resources? a. A b. B c. C d. D e. EWhich point in Figure 2-3 is not possible for this society to produce?Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. The opportunity cost of moving from point A to point E is a. zero b. 30 cassettes c. 180 compact disks d. cannot be determined because point E is unattainable under current technology and resources e. 80 cassettesWhen all resources used in production are not perfectly substitutable, a. specialization does not lead to greater production b. the economy or firm is producing at a point outside of its production possibilities frontier c. there will be constant opportunity costs d. the production possibilities frontier will be concave (bowed outward) e. the economy or firm will only produce one good in equilibriumWhich production possibilities frontier(s) in Figure 2-4 depict(s) a situation in which all resources are perfect substitutes in production? a. both C and E b. both D and E c. C d. D e. EIf an economy's production possibilities frontier shifted to the right, this would illustrate a. increasing opportunity cost b. decreasing opportunity cost c. a fall in resource utilization d. economic growth e. a rise in resource utilizationFigure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture. Suppose it decided to produce 18 rockets and 12 cruise ships. Which of the following would be true? a. This combination could not be produced. b. The country will be at point B. c. The country will be at point C. d. The country will not be fully utilizing its resources. e. The country will be at the midpoint of points B and DFigure 2-5 shows five different points along the production possibilities frontier for a country that produces rockets and cruise ships. If the country is currently operating at point C and decided to move to point B,Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture. The production possibilities frontier that is illustrated in Figure 2-5 exhibitsTwo reasons why an economy might operate inside of its production possibilities frontier are a. productive efficiency and technological change b. depressions and inflation c. recessions and productive inefficiency d. opportunity costs and substitutability of resources used in production e. productive inefficiency and a decrease in the state of technologyA shift in the production possibilities frontier from DC to EC in Figure 2-6 could be due to a a. technological improvement in the production of ice cream b. reduction in the rate of unemployment c. rise in the rate of unemployment d. technological improvement in the production of frozen yogurt e. fall in the demand for frozen yogurt