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,DOWNLOAD THE Test Bank for Essentials of Economics 7th Edition Hubbard
n n n n n n n n n n




EssentialsnofnEconomics,n7en(Hubbard)
Chaptern2 Trade-offs,nComparativenAdvantage,nandnthenMarketnSystem

2.1 ProductionnPossibilitiesnFrontiersnandnOpportunitynCosts

1) Scarcity
A) stemsnfromnthenincompatibilitynbetweennlimitednresourcesnandnunlimitednwants.
B) cannbenovercomenbyndiscoveringnnewnresources.
C) cannbeneliminatednbynrationingnproducts.
D) isnanbiggernproblemninnmarketneconomiesnthanninnsocialistneconomies.n
Answer:n A
Diff:n2
PagenRef:n42n
Topic:n Scarcity
*:n n Recurring
LearningnOutcome:n Micro-
1:nIdentifynthenbasicnprinciplesnofneconomicsnandnexplainnhowntonthinknlikenanneconomist
AACSB:n n Analyticalnthinking

2) Inn2017,nTeslanMotorsnintroducednthenModeln3,nitsnfirstnlowncostnmodelnwhichnitnhadnhopedntonsel
lnforn$35,000nbutnrealizednthatnitnwouldnlosenseveralnthousandndollarsnperncarnatnthatnprice.nPriorntonth
enintroductionnofnthenModeln3,nTesla'sntwonexistingnmodelsn(thenModelnSnsedannandnthenModelnXnS
UV)nhadnstartingnpricesnofnovern$70,000nandnatnthosenprices,nthencompanynwasnearningnanprofitnonne
achncarnsold.nTeslanCEOnElonnMusknsaidnthatn"Highernvolumenandnmanufacturingndesignnimprove
mentsnarencrucialnfornTeslan[tonsellnthenModeln3natnanpricenofn$35,000]..............................."nIn
decidingntonincreasenvolumenandnimprovenmanufacturingndesignnfornthenModeln3,nTesla
A) facednnontrade-
offsnbecausenitnwasnalreadynmakingnanprofitnsellingnitsnModelnSnandnModelnXnvehicles.
B) facednantrade-
offnbetweenndevotingnadditionalnresourcesntonthenproductionnofnthenModeln3nandndevotingnaddition
alnresourcesntonproducingnitsnothernmodels.
C) wasnguaranteedntonbenablentonreducencostsnonnitsnModeln3ntonanpointnwherenitncouldnsellnthen
Modeln3natnanpricenofn$35,000nandnearnnanprofit.
D) hadnnonchoicenbutntonincreasenthensellingnpricesnofnitsnModelnSnsedannandnModelnXnSUV.nA
nswer:n B
Diff:n2
PagenRef:n40nT
opic:n OpportunitynCost
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking
SpecialnFeature:n n ChapternOpener:nElonnMusknandnTeslanMotorsnFacenanTrade-Off




1
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,DOWNLOAD THE Test Bank for Essentials of Economics 7th Edition Hubbard
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3) Thenconceptnofnopportunityncostnisnthat
A) innanmarketneconomy,ntakingnadvantagenofnprofitablenopportunitiesninvolvesnsomenmoneyncost.
B) theneconomicncostnofnusingnanfactornofnproductionnisnthenalternativenusenofnthatnfactornthatnisng
ivennup.
C) takingnadvantagenofninvestmentnopportunitiesninvolvesncosts.
D) thencostnofnproductionnvariesndependingnonnthenopportunitynforntechnologicalnapplication.n
Answer:n B
Diff:n2
PagenRef:n43nT
opic:n OpportunitynCost
*:n n Recurring
LearningnOutcome:n Micro-
1:nIdentifynthenbasicnprinciplesnofneconomicsnandnexplainnhowntonthinknlikenanneconomist
AACSB:n n Analyticalnthinking

4) Thenproductionnpossibilitiesnfrontiernshowsnthen
combinationsnofntwonproductsnthatncannbenproducedninnanparticularntimenperiodnwithnavailablenr
esources.
A) minimumnattainable
B) maximumnattainable
C) only
D) equitable
nAnswer:n B

Diff:n2 PagenRef:n42
Topic:n n ProductionnPossibilitiesnFrontiers
*:n n Recurring
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking

5) Thenproductionnpossibilitiesnfrontiernmodelnshowsnthat
A) ifnconsumersndecidentonbuynmorenofnanproduct,nitsnpricenwillnincrease.
B) anmarketneconomynisnmorenefficientninnproducingngoodsnandnservicesnthannisnancentrallynp
lannedneconomy.
C) economicngrowthncannonlynbenachievednbynfreenmarketneconomies.
D) ifnallnresourcesnarenfullynandnefficientlynutilized,nmorenofnonengoodncannbenproducednonlynbynp
roducingnlessnofnanotherngood.
Answer:n n D
Diff:n2 PagenRef:n42
Topic:n n ProductionnPossibilitiesnFrontiers
*:n n Recurring
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking




2
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, DOWNLOAD THE Test Bank for Essentials of Economics 7th Edition Hubbard
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6) Thenproductionnpossibilitiesnfrontiernmodelnassumesnwhichnofnthenfollowing?
A) Labor,ncapital,nland,nandnnaturalnresourcesnarenunlimitedninnquantity.
B) Theneconomynproducesnonlyntwonproducts.
C) Productionnofnanynlevelnofnthentwonproductsnthatntheneconomynproducesnisncurrentlynpossible.
D) Thenlevelnofntechnologynisnvariable.n
Answer:n B
Diff:n2 PagenRef:n42
Topic:n n ProductionnPossibilitiesnFrontiers
*:n n Recurring
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking

7) Thenattainablenproductionnpointsnonnanproductionnpossibilitiesnfrontiernare
A) thenhorizontalnandnverticalnintercepts.
B) thenpointsnalongnthenproductionnpossibilitiesnfrontier.
C) thenpointsnoutsidenthenareanenclosednbynthenproductionnpossibilitiesnfrontier.
D) thenpointsnalongnandninsidenthenproductionnpossibilitynfrontier.n
Answer:n D
Diff:n2 PagenRef:n42
Topic:n n ProductionnPossibilitiesnFrontiers
*:n n Recurring
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking

8) Thenpointsnoutsidenthenproductionnpossibilitiesnfrontiernare
A) efficient.
B) attainable.
C) inefficient.
D) unattainable.
nAnswer:n D

Diff:n2 PagenRef:n43
Topic:n n ProductionnPossibilitiesnFrontiers
*:n n Recurring
LearningnOutcome:n Micro-
3:nDiscussndifferentntypesnofnmarketnsystemsnandnthengainsnthatncannbenmadenfromntrade
AACSB:n n Analyticalnthinking




3
Copyrightn©n2021nPearsonnEducation,nInc.
mynursytest.store