Professional Documents
Culture Documents
award:
10.00
points
Multiple Choice
Difficulty: 1 Easy
award :
2.
10.00
points
thelunaamentarjifObi'emoteconcimtcsis
(
Multiple Choice
Difficulty: 1 Easy
awa rd :
3.
10.00
points
.... ...... ;;: conseq.uence oitlie ecoiiam-ic problem of scardtYis ..that ......
.... . .....
Multiple Choice
Difficulty : 1 Easy
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\!Vhicticifiiletoilowin9 ..is.notata.ct'orc;t'pr:oc:iu'Ctioi1? .
A psychiatrist
(' A bulldozer.
Land , labor, capital , and entrepreneurship are the factors of production. Money does not fall under any category of the
factors of production . Factors of production are what are needed on a camping trip. Money is not needed on a
camping trip.
Multiple Choice
Difficulty: 2 Medium
award :
5.
10.00
points
(' Factors of production are also known as resources.
->C Only those resources that are privately owned are counted as factors of production .
Multiple Choice
Difficulty: 2 Medium
awa rd :
6.
....
.....
10.00
points
.. Which ciftile toilowiii.9"i5'ihe.best"exampie..cif land?
A barber's chair.
If it directly becomes a part of the final product, it is land or a raw material. Water used to float a boat is the same as a
delivery van. In this case it would be capital.
Multiple Choice
Difficulty: 2 Medium
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--+r
Final goods that are used to produce other goods and services .
Physical capital is used to produce other goods and services, including other capital goods. Hammers produce
houses. Forklifts move forklift parts around a forklift factory . Money is financial capital, which is a throughput. It is used
to acquire a hammer or physical capital.
Multiple Choice
Difficulty: 1 Easy
award:
8.
10.00
points
Which
technology, and growth?
r
r
{
--+r
Lord Kelvin.
Kenneth Olsen .
Irving Fisher.
John Maynard Keynes.
Competition leads companies to always try to do something better and more efficiently in order to maximize profits.
Multiple Choice
Difficulty : 1 Easy
award:
9.
10.00
points
Economics.can.i:ie .definedasihe.stlid.ot
--+r
How scarce resources are allocated on a macro level to best meet society's goals or on a micro level to
best meet an individual's or firm's goals.
None of the choices are correct.
Economics studies how we get the most we can out of what we have.
Multiple Choice
Difficulty: 1 Easy
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10.
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points
r
-.r
r
r
...... ...............
Guns and butter can be produced using the same resources at the same time.
An increase in national defense implies more sacrifices of civilian goods and services.
An increase in national defense is possible only if we produce more butter.
All of the choices are correct.
To get more of one good , we must sacrifice production of other goods. "Guns versus butter" is a figurative way of
expressing the trade-off between defense and civilian goods and services.
Multiple Choice
Difficulty: 1 Easy
award:
11
10.00
points
liihicilc;titietoilowing .isa:;; a'ssumption under which the pr.odu'Ction .. p.o.sslbiiities c-c;;:;;e;--[5 drawn?
r
-.r
Multiple Choice
Difficulty: 1 Easy
award :
12.
10.00
points
r
-.r
r
r
A straight line indicating that the law of increasing opportunity costs applies.
A straight line when there is constant opportunity costs.
A line that curves outward when resources are perfectly adaptable in the production of different goods.
A line that curves inward when resources are perfectly adaptable in the production of different goods .
A straight-line production possibilities curve means resources are equally adaptable to producing either good .
Multiple Choice
Difficulty : 2 Medium
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.. . . . . . . . ... . . ...............................
Multiple Choice
Difficulty : 1 Easy
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Bowed outward until the two goods are equal, and then bowed inward.
A bowed-out production possibilities curve means opportunity costs are increasing as we move from one point to
another along the curve.
Multiple Choice
Difficulty: 2 Medium
award:
15.
10.00
points
r
r
The production possibilities curve between tanks and automobiles will appear as a straight line.
The production possibilities curve between tanks and automobiles will shift outward .
(" Decreasing opportunity costs will occur with greater automobile production .
__.(" Increasing opportunity costs will occur with greater tank production .
Factors of production, including capital, are specialized , meaning they are generally better suited for one use.
Multiple Choice
Difficulty : 3 Hard
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Desired output
Actual output
.. ........ ..
Potential output is the maximum attainable output with our limited resources, and the production possibilities curve
shows the limits of our options.
Multiple Choice
Difficulty: 1 Easy
awa rd :
17.
10.00
points
iran .economy.is .iJroCilicin9 .. i.i i.side.. ttie ..i>roduci'ior1iJ.655ibiiities...cur:ve,ttier1
No goods must be given up to move from an inefficient to an efficient level of production. Hence, there is no sacrifice
or opportunity cost
Multiple Choice
Difficulty: 2 Medium
award:
18.
-.
10.00
points
......................................
................................... .
'"'""'""' "'"'""
Is not a very efficient means of communicating consumer demand to the producers of goods and
services.
Multiple Choice
Difficulty : 1 Easy
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points
Market success.
Multiple Choice
Difficulty: 2 Medium
award :
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points
economy
(" Is justified by the superiority of laissez faire over government intervention .
_,(" Utilizes both market and nonmarket signals to allocate goods and services.
Relies on the use of central planning by private firms rather than the government.
Multiple Choice
Difficulty : 1 Easy
award :
21
10.00
points
'W tien the invisibie' iland. does not produce o'ptimai ciu'icomes ..
_,I
I
. . . .....
Market failure.
Government failure .
Scarcity.
Market failure situations call for possible government action to hopefully improve the outcome toward a socially
optimal or socially efficient outcome.
Multiple Choice
Difficulty: 1 Easy
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points
r
r
__,r
The unemployment rate for the United States rose to 5 percent in the last quarter.
The Federal Reserve lowered interest rates at its last meeting .
Congress increased the minimum wage rate in January.
Jenny's wage rate rose, and in response, she decided to work more hours.
Multiple Choice
Difficulty : 1 Easy
award:
23.
10.00
points
Structure and performance of individual markets and the operation of the price system.
Operation of the entire economy.
r,
Microeconomics studies how the foundation of an economy and individual markets work.
Multiple Choice
Difficulty: 1 Easy
award:
24.
10.00
points
__,r
r
Multiple Choice
Difficulty : 1 Easy
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10.00
points
Economic models are..
r
r
useCi by.economists to
_,r
The economic models are designed to benefit society and prevent us from doing things that lead to lower living
standards.
Multiple Choice
Difficulty: 1 Easy
award:
26.
10.00
points
Housing
Figue 1.1
P1oduction Possibilities Curve
At which point is society employing some of its available technology but not all of it? (See Figure 1.1.)
r s.
_,r c.
r
D.
Multiple Choice
Difficulty: 2 Medium
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points
.8
D
PP1
.PP2
Figure 1.4
A movement from point C to point A in Figure 1.4 results in
(" More efficient production.
(" Permanent unemployment of workers producing plasma televisions.
(" A reallocation of resources from MP3 player production to plasma television production.
___.(' A reallocation of resources from plasma television production to MP3 player production.
Moving from one point to another on the same production possibilities curve represents changing the combination of
the two goods.
Multiple Choice
Difficulty: 3 Hard
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points
.s
D
PPl
PP2
Figure 1.4
In Figure 1.4, a shift of the production possibilities curve from PP1 to PP2 could be caused by
(' An increase in the unemployment rate.
_,(' Implementation of training programs that improve the skills of workers .
(' Tougher pollution controls for the producers of plasma televisions and MP3 players .
An increase in any resource, including physical or human capital, increases the production possibilities curve.
Multiple Choice
Difficulty: 3 Hard
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29.
10.00
points
PP1
PP2
OUTPUT OF DOUGHNUTS
Figu1e 1.5
Using Figure 1.5, if an economy is currently producing on PP2, which of the following would shift the production
possibilities curve toward PP1?
(' An increase in the quantity of labor available.
--->(' A decrease in the amount of capital available.
An advancement in technology.
If resources decrease, the production possibilities curve will shift inward toward the origin .
Multiple Choice
Difficulty: 3 Hard
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10.00
points
u..
0
t-
::)
a.
t::>
0
PP1
PP2
OUTPUT OF SUVs
Figure 1.6
Using Figure 1.6, if an economy has the capacity to produce represented by PP1 , then point E represents
I
A change in technology.
Multiple Choice
Difficulty: 3 Hard
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points
........................... ., ..........................................
PP1
PP2
OUTPUT OF SUVs
Figure 1.6
In Figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest?
-.r
F.
r s.
r c.
r
D.
Since most of the economy is devoted to SUV production at point F, allowing more resources to go toward car
production would result in only a small loss of SUVs (a low opportunity cost) . Since point "D" is not on a PPC, its
slope cannot not be determined .
Multiple Choice
Difficulty : 3 Hard
9117/2013
Page 15 of 40
award:
32....... ..
.
.,,
10.00
points
.,,. , ... ,.
....... .
PP1
PP2
OUTPUT OF SUVs
Figure 1.6
In Figure 1.6, at which of the following points would the opportunity cost of producing one more SUV be highest?
C A.
r s.
r c.
_.r
F.
Opportunity cost is determined by the slope of the production possibilities curve. The slope is steepest at point "F" for
all of the possible answers. Since point "A" is not on a PPC, its slope cannot be determined .
Multiple Choice
Difficulty: 3 Hard
9/17/2013
Page 16 of 40
award:
33.
10.00
points
1:;:)
A '
\....
tO
a.. Q)
1- >
:::
Q)
0.
J!l
.....
.c:
0u..
B: -------- tE
\....
:1
!I
:;,
- - - - - - - - t:- ---
IF IH
I
I
I
I
K L M
ClOTHING OUTPUT
(units per year)
Point D only.
Point G only.
r
_.r
Point J only.
Points D, G, and J.
Any point along the production possibilities curve is considered an efficient point.
Multiple Choice
Difficulty: 3 Hard
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34.
10.00
points
BI
ff
--- -----
'
I
I
--------!p:-----
IF IH
K L M
CLOTHING OUTPUT
Figu1e 1.7
Refer to Figure 1.7. The cost of producing at point G rather than point Dis
r
I
_.r
r
OA units of food .
KL units of clothing .
AB units of food.
OL units of clothing .
To get additional clothing, food must be given up as resources are shifted out of the food industry.
Multiple Choice
Difficulty: 3 Hard
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35.
10.00
points
--------t,IE
I
I
I
-- ------t:- _,_
IF tH
I
I
I
K L M
ClOTHING OUTPUT
_.r
r
r
OA units of food .
KL units of clothing.
AB units of food .
OL units of clothing.
By moving resources out of the food industry and into the clothing industry, more clothing may be produced .
Multiple Choice
Difficulty: 3 Hard
9/17/2013
Page 19 of 40
award:
36.
10.00
points
, ,N
-------- t.,E
I
I
- - - - - - - - f:- ---
IF IH
I
I
I
K L M
CLOTHING OUTPUT
Multiple Choice
Difficulty: 3 Hard
9/17/2013
Page 20 of 40
award :
37.
10.00
points
1-"'C"
~
0..
tO
Q)
1->
~ i
Oc.
Cl ~
0 c:
0 :::s
u..-
- - -- - - - - t: -
IF
I
-.~
.:a
I
I
I
K L M
ClOTHING OUTPUT
__.r
!
Multiple Choice
Difficulty: 3 Hard
9117/2013
Page 21 of 40
award:
38.
10.00
points
...................................................................................................
A
I
--------t:E
I
I
I
,F IH
I
I
I
K L M
ClOT:HII NG OUTPUT
(units per year)
Figute 1.7
Refer to Figure 1.7. Which of the following points are considered to be inefficient?
D.
->('" E.
('" G.
('" D, G, and J.
Production choices that fall inside the production possibilities curve are considered inefficient.
Multiple Choice
Difficulty: 3 Hard
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Page 22 of40
award:
39.
................. ..
,
..... ,
10.00
points
,,, . ,
... ,. ...
--------t,,E
:J
- - - - - - - - f: - ---
IF IH
I
I
I
I
I
K L M
CLOTHING OUTPUT
Figu1e 1.7
Refer to Figure 1.7. Which of the following points show unemployment of resources above the normal rate?
_.r
r
r
r
H.
J.
N.
D.
Resources must be unemployed at production levels below the production possibilities curve.
Multiple Choice
Difficulty: 3 Hard
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award:
40.
10.00
points
ial:>ie1 : fstiowsiile. tiypott1etiC:afirade~oH.I:>eiWeen dH'fe.renlcom5iriaiiorisofsleaHh.hom5ersand s~1 boml:>ers .ttiai
might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the
required opportunity costs for both the B-1 and Stealth bombers.
T
lJ
Number
of Stealth
Bombers
10
9
7
..J.
Combination
Opportunity cost
Opportunit~
Cost ofB-ls in
Tenus of Stealth
Bombers
Bombers in
Terms ofB-l s
Number
ofB -l s
0
1
')
.-..,.
_
Table 1.1
Production Possibilities fm Bombers
In the production range of 7 to 9 Stealth bombers, the opportunity cost of producing 1 more Stealth bomber in terms of B
-1s is
r o.
r
_.r
3.
o.s.
2.
In this production range, 2 additional stealth bombers require us to forgo the opportunity to produce one entire B-1
bomber, or half a B-1 bomber for each Stealth bomber.
Opportunity cost
of Stealth
Combination
s
T
tT
y
Table 1.1
Number
of Stealth
Bombers in
Bombers
Terms ofB-ls
10
9
1 1= 1
7
l + 2 = 0.5
""""'
4
1 "';" ' = 0,.),)
t
0
....
Number
ofB-ls
0
Opportunity
Cost ofB-ls li1
Tenus of Stealth
Bombers
1 -T 1
2 -;- 1 :::::;:
..,
'
..,
.,
-;-
:::::;:
1
')
..,
J = ,)
An~wers
Multiple Choice
Difficulty: 3 Hard
9/17/2013
Page 24 of 40
award:
41.
10.00
points
....................... i'ahie.. 1.: fsii.ows ..iile. tiypoiiieti'caii rade-otfhetvie.enartterentc:amhl.riai ions.Cif'steartii.hom5ers.aria .. s~f bomhers .iilai--
might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the
requ ired opportunity costs for both the B-1 and Stealth bombers.
lT
Number
of Stealth
Bombers
10
9
7
\"
.J
Combination
s
T
Opportunity cost
of Stealth
Bombers in
Terms of B-ls
Number
ofB -ls
0
1
Opportunity
Cost ofB-1 sin
Terms of Stealth
Bombers
"'"'
Table l.l
Ptoducti.otrl Possibilities f oli Bo111bers
The highest opportunity cost anywhere in Table 1.1 for Stealth bombers in terms of B-1 bombers is
__,r
r
r
r
This is one of the extreme points on the production possibilities curve where it meets the axis on the Stealth bomber
end.
Combination
s
T
,.lT
Opportunity c.o st
of Stealth
Bombers in
Tenus ofB-ls
Number
of Stealth
Bombers
!0
9
1 1= 1
1 + 2 = 0.5
J -:-. -"'_,\ -- 0 . . .
,.) .)
Number
ofB -ls
0
1
2
_
"',
Opportunity
Co t of B-l s in
Tenn.: of Stealth
Bombers
1= 1
2+ 1= 2
_..., -:- 1 = .i
1
Difficulty : 3 Hard
9117/2013
Page 25 of 40
award:
42.
10.00
points
Tat>ie; :; :fsh.ows tlle.tiypotheti'C:afirade-otf"t>etvie.en di.fferentcoilihi'riaiioils. of'.s!ea'iih..b'ombers.ai1Cis~:;bombe.rs .ttiat ..
might be produced in a year with the limited U.S. capacity, ceteris paribus. Complete the table by calculating the
required opportunity costs for both the B-1 and Stealth bombers.
Opportunity cost
of SteaJth
Bombers in
Tenns. of B-1 s
Number
of Stealth
Bombers.
10
7
4
')
Combination
Number
ofB -ls
Opportunity
Cost f B-1 H in
Terms of Stealth
Bombers
0
.._
,"'
T4tble 1.1
P1oducdon Possibilities fot Bombers
The highest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is
I
--->r
This is one of the extreme points on the production possibilities curve where it meets the axis on the B-1 bomber end.
Opportunit~
Combination
Nmnber
of Stealth
Bombers
[0
lT
\.
cost
of Stealth
Bombers in
Terms ofB-ls
I+ l ; ;: ; 1
1 + 2 = 0.5
... ~
1 _:.,_ _,.'\. . . -- 0-.,'.
Opportunity
Number
ofB -ls
0
1
')
...
_.)
Cost of B-l s in
Terms of Stealth
Bombers
1 -7- 1 = 1
27 1=2
... + l - ...
;)
- '
Difficulty : 3 Hard
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award :
43.
10.00
points
Opp()I'tlmity cost
of Stealth
Bombers in
Tenus ofB-l s
Combination
Number
of Stealth
Bombers
10
tT
v
7
4
Number
ofB -ls
O pportunity
Cost of B-1 s in
Terms of Stealth
Bombers
Table 1.1
Production Possibilities fm Bontbers
The lowest opportunity cost anywhere in Table 1.1 for B-1 bombers in terms of Stealth bombers is
r
C,
_.r
(
This is one of the extreme points on the production possibilities curve where it meets the axis on the Stealth bomber
end.
Opportunit~
Number
of Stealth
Bombers
10
Combination
cost
of Stealth
Bombers in
Terms of B-ls
1+ 1 = 1
1 -;- 2 = 0.5
Number
ofB -ls
0
1
2
Oppotiunity
Cost of B-1 s in
Terms of Stealth
Bombers
1+ 1= 1
2+ 1= 2
Multiple Choice
Difficulty: 3 Hard
9/17/2013
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award :
44.
10.00
points
Opportunity Cost of
Skalth Bomb<:.rs in
Terms ofB-1
Bombers
Combination
A
B
Number of
Stea lth
Bombers
195
180
J:o
100
'
Number of
B-J
Bombers
20
:15
45
50
------.
Tabl(' l.2
I~roducriou
On the basis of your calculations in Table 1.2, what is gained by producing at point B rather than point C?
I
45 B-1 bombers.
10 B-1 bombers.
Reallocating resources to Stealth bombers will allow 30 (180- 150) additional Stealth bombers to be produced .
Ot portun.ity Cost of
Number of
Combination
c\
Bombc.::rs
J 195
180
150
I 100
D
Table- 1.2
Stealth
Stealth Bomb~:rs in
Terms ofB-l
Bombers
J 5 -:-
t::- -
10 + 30 = 0.33
45
5 -:- 50 = 0.1
50
I 5 -:- !5 - I
- --
30 + 10 = 3
50 + 5 = 10
.-\.DS\H~ts
Multiple Choice
Difficulty: 3 Hard
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award :
45.
10.00
points
fable 1:2"5ilows..ii1e ilypotileticaTiraCie~otf5etv:ieen .aifierentcom"b i iiaticiiis. of' .siea'iihhombei-s.ana s~1 bomhe.rs .iilat
might be produced in a year with the limited U.S. capacity , ceteris paribus. Complete the table by calculating the
required opportunity costs for both the B-1 and Stealth bombers.
Combination
--\.
B
Nu m her of
Stealth
Bombers
195
180
150
100
('
'-----
Opportunity Cost of
Sh!alth Bombers in
Terms ofB-1
Bombers
45
50
-.
Ta ble 1.1
rrod uction P ossibilities fot Bombers
On the basis of your calculations in Table 1.2, what is gained by producing at point B rather than point A?
35 B-1 bombers.
-.r
15 B-1 bombers.
Combination
_\
II
umber of
Stealth
Bombers
Opportunity Co~t of
Stealth Bombers in
Tenus ofB-1
Bombers
195
180
150
100
20
15 + 15- 1
10 + 30:::: 0.33
5 + 50= O.l
-..
~")
4'5
50
15+15- 1
30 + 10 = 3
50 + 5 = 10
Difficulty : 3 Hard
9/17/2013
Page 29 of 40
award:
46.
10.00
points
Combination
J
K
L
Number
of
Bmshes
0
10
M
N
Opportunity Cost
of Brushes in
Terms
of Combs
Opportunity Cost
of Combs in Terms
of Brushes
:-lumber
of Combs
4
..,
17
"2
21
23
Table 1.3
Production Possibilities for Brushes and Combs
On the basis of your calculations in Table 1.3, what is gained by producing at point M rather than point N?
r
r
_,r
23 combs.
21 combs.
1 comb.
(" 2 combs.
Sh ifting resources toward production of combs allows for greater comb production (1 - 0) .
Combiltation
J
K
L
M
N
Number
of
Bmsltes
0
10
]7
21
__,
? ""
Opportunity Cost
of Br ushes in
Opportunity Cost
of Combs in Terms
of Brushes
T <:!rtllS
~umber
of Combs
of Combs
4
1-:-1 0 = 0.10
1 -:-7 = 0.1 4
1 + 4 = 0.25
1 + 2 = 0.50
3
2
1
0
i
I
10 -:- 1 = 10
7-:-1 = 7
4+ 1=4
2+ 1= 2
Difficulty : 3 Hard
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points
Combi11ation
J
K
L
Number
of
Brushes
0
10
17
21
Opportunity Cost
ofBnn:hes in
Terms
of Combs
of Combs
4
3
2
1
?~
Oppm1unity Cost
of Combs in Terms
of Brushes
~umber
-"
Table 1.3
Production Possibilities for Brushes ami Combs
On the basis of your calculations in Table 1.3, what is gained from producing at point L rather than point K?
I
17 combs.
10 combs.
1 brush .
__.(' 7 brushes.
Shifting resources toward production of brushes allows for greater brush production (17- 10).
Combination
J
K
L
M
N
Number
of
B111sltes
0
10
17
21
23
Opportunity Cost
ofBrushes in
Terms
of Combs
Opportunity Cost
ofCombs in Tenus
ofBnlshes
~umber
of Combs
4
1710 = 0.10
177 =0.14
1 + 4 = 0.25
1 + 2 = 0.50
10 7 1 = 10
3
2
iI
7+1=7
4 .;. 1 = 4
2+1 =2
Difficulty: 3 Hard
9117/2013
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points
Combination
J
Number
of
Bntshe$
0
10
Opportunity Cost
of Brushes in
Terms
of Combs
..,_,
17
L
M
N
Opportunity Cost
of Combs in Terms
of Brushes
)Jumber
of Combs
2
1
21
')"'
-'
Table 1.3
Prmluction Possibilities for Brushes and Combs
On the basis of your calculations in Table 1.3, the law of increasing opportunity costs applies to
->r
A production possibilities curve will be bowed out from the origin where there are increasing opportunity costs.
Combittation
J
Number
of
Brushes
0
10
17
~v(
21
23
Opportunity Cost
of Bt1lshe s in
Terms
of Combs
)Jumber
of Combs
4
1-7-10 = 0.10
1-7- 7=0. 14
1 .;. 4
1 .;. 2
=
=
0.25
0.50
Opportunity Cost
ofCombs in Terms
of Brushes
3
2
1
0
10 -7- l = 10
7-7-1=7
4+ 1 =4
I
2.;.1=2
Difficulty: 3 Hard
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Combination
J
Number
of
Bmshes
0
10
Opportunity Cost
of Brushes in
Terms
of Combs
17
L
M
N
21
')~
-'
Opportunity Cost
of Combs in Tenus
of Brushes
::.lumber
of Combs
4
3
2
1
0
Table 1.3
Production Possibilities for Brushes anc:l Combs
On the basis of your calculations in Table 1.3, in the production range of 2 to 3 combs the opportunity cost of producing
1 more comb in terms of brushes is
3.33.
____.(" 7.0.
r
r
o.67.
o.14.
Shifting resources toward more combs requires a drop in the production of brushes.
Combination
J
K
L
lvf
N
Number
of
Bm sh es
0
10
17
21
2"'
'
Opportunity Cost
of Brushes in
Terms
of Combs
1-:-1 0 = 0.10
1-:-7 = 0.14
1 ..;. 4 = 0.25
I . ;. 2 = 0.50
Number
of Combs
4
3
2
1
0
Opportunity Cost
of Combs in Tenus
of Brushes
I
I
I
I
'
10-:-1 = 10
7-:- 1 = 7
4 .;.. 1 = 4
2 .;.. 1 = 2
Difficulty: 3 Hard
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Combination
J
K
L
1v[
N
Number
of
Bmshes
Opportunity Cost
of Brush~ s in
Terms
of Combs
Oppmiunity Cost
of Combs in Tenus
of Brushes
~umber
of Combs
4
0
10
3
2
1
0
17
21
23
Table 1.3
Production Possibilities for Brushes anti Combs
On the basis of your calculations in Table 1.3, in the production range of 21 to 23 brushes the opportunity cost of
producing more comb in terms of brushes is
r
_.r
r
1/21 .
21/23.
1/2.
4.
Shifting resources toward more brushes (2) requires a drop in the production of combs (1 ). Therefore for each 1
brush , Y. a comb is given up (1 divided by 2).
Combination
J
Number
of
Bmshes
0
10
17
}..;{
21
23
Opportunity Cost
ofBrushes in
Terms
of Combs
Opportunity Cost
of Combs in Terms
of Brushes
~umber
of Combs
4
1-:-10 =0 .10
1+7 =0.14
1 ..;. 4 = 0.25
1..;. 2 = 0.50
3
2
1
I
I
10 -i- 1 = 10
7-:-1=7
4+1=4
2+1 = 2
Difficulty: 3 Hard
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award:
51.
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points
. . .... ...... i'abie 1.3shows..the hypotheticaf trade~off between different'combinations' of hrus.hes"and' comtis"that 'might be-produced
in a year with the limited capacity for Country X, ceteris paribus. Complete the table by calculating the required
opportunity costs for brushes and combs.
Combination
J
K
L
Number
of
Bmshes
0
10
Opportunity Cost
of Combs in Terms
of Brushes
:.Iumber
of Combs
4
3
..
17
21
23
Opportunity Cost
of Brushes in
Terms
of Combs.
' )
Table 1.3
Production Possibilities for Brushes and Combs
On the basis of your calculations in Table 1.3, in the production range of 1 to 2 combs the opportunity cost of producing
1 more comb in terms of brushes is
_.r
4.
(' 1/2.
2111 .
(' 1/7.
Shifting resources toward more combs requires a drop in the production of brushes.
Combination
J
K
L
Numbet
of
Bmsltes
0
Opportunity Cost
ofBrushes in
Terms
of Combs
1..;-10 =0.10
1..;-7 =0. 14
lvf
10
17
21
2~
T~lble
Opportunity Cost
ofCombs in Terms
I of Brushes
:.Iumber
of Combs
1.;. 4
l.;. 2
0.25
0.50
3
2
1
0
I I
I
10..;-1 = 10
7..;-1 = 7
4.;.1=4
2+1=2
1.3 Answers
Multiple Choice
Difficulty: 3 Hard
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52.
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points
.............................. faiJie '1 Ssti.ows..ttie tiypotileticai"trad'e~oifiJetween. di'fferent'ccimbinations.. ot'b'ru s'hes .and combs.ttiat'.mi9'hi.tie produced.
in a year with the limited capacity for Country X , ceteris paribus. Complete the table by calculating the requ ired
opportunity costs for brushes and combs.
Number
of
Brushes
0
10
17
21
?'"~
Combination
J
K
L
Opportunity Cost
ofBru shes in
Terms
of Combs
:.lumber
of Combs
4
Oppmiunity Cost
of Combs in Tenus
of Brushes
"'_,
2
1
0
...
T able 1.3
Production Possibilities for Brushes and Combs
On the basis of your calculations in Table 1.3, the highest opportunity cost for brushes in terms of combs is
(" 0.10 comb per brush .
(" 23 combs per brush.
__.(" 0.50 comb per brush .
(" 0.29 comb per brush.
This is a point where the production possibilities curve touches the axis. The opportunity costs are 0.10, 0.14, 0.25,
and 0.5, respectively , as we increase brush production.
Combination
J
K
L
l'vf
N
T~lble
Number
of
Brushes
0
10
17
,.
21
~-'
Oppormnity Cost
of Brushes in
Terms
of Combs
Opportunity Cost
of Combs in Tenus
of Brushes
:Jumber
of Combs
4
1 7 10 = 0. 10
17 7 = 0.14
1 7 4 = 0.25
1 + 2 = 0. 50
3
2
1
0
1071 = 10
771 = 7
4+ 1 = 4
2+ 1 = 2
1.3 Answers
Multiple Choice
Difficulty: 3 Hard
~----
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~-
9/17/2013
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award:
53.
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points
............................ ffibi9"1.3 ShOWS..ih9"hYPOihE!tiC8firade-otfbetween different com'binaiiO.rl'S..Ofhrush9S"8nd . COrrlbS. ihat might b9. proauced
in a year with the limited capacity for Country X, ceteris paribus. Complete the table by calculating the required
opportunity costs for brushes and combs.
Combi1t<ltion
J
K
L
Number
of
Brushes
0
10
Opportunity Cost
of Brushes in
Tenns
of Combs
17
21
of Combs
4
3
2
1
0
?~
Opportunity Cost
of Combs in Terms
of Brushes
~umber
--~
Table 1.3
Pr(){luction Possibilities for Brushes and Combs
On the basis of your calculations in Table 1.3, the lowest opportunity cost for combs in terms of brushes is
r
->r
r
This is a point where the production possibilities curve touches the axis. For each combination , the opportunity costs
for 1 comb are 10, 7, 4, and 2.
Combination
J
K
L
}v(
N
T~lble
Number
of
Bntshes
0
10
17
21
2:1
Oppl)ft\lnity Cost
of Brushes in
Tenns
of Combs
1-;-1 0=0.10
}-;-7 =0. 14
1 .;. 4 = 0.25
1 .;. 2 = 0.50
Opportunity Cost
of Combs in Terms
of Brushes
I
:'-Jumber
of Combs
3
2
1
0
! I
I
I
10-;- 1 = 10
7-;-1 = 7
4-;-1=4
2-;-1=2
1.3 Answers
Multiple Choice
Difficulty: 3 Hard
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.,.,..,
4.5
4.0
3.5
3.0
2.5
2.0
l.S
l.O
.5
10
20
30
40
5(]
STUDY TIME
Figure 1.8
Rehding Gt~des and Hours Studied
Figure 1.8 suggests that
r
r
_,r
r
The function beg ins with a constant positive slope, and then it becomes nonconstant.
Multiple Choice
Difficulty: 2 Medium
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y
80 - - - .. - - - - - - - - - - Ivf
50
30
15
25
50
75
100
Figure 1.9
In Figure 1.9, the slope of the line between points K and L is
r
_.r
1.25.
o.8o.
r o.75.
r o.6o.
The slope is calculated as the change in the vertical variable divided by the change in the horizontal variable (0.80 =
20/25) .
Multiple Choice
Difficulty: 2 Medium
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56
10.00
points
80 - - - - .... - - - - - - - - -
50
30
15
0
25
50
75
100
Figure 1.9
In Figure 1.9 the slope of the line is
r
r
r
Multiple Choice
Difficulty: 2 Medium
award :
57.
10.00
points
r
_,r
r
Multiple Choice
Difficulty: 3 Hard
9/17/2013
Page 40 of40
award :
58.
10.00
points
I
I
I
Adam Smith.
Karl Marx.
Ronald Reagan.
Multiple Choice
Difficulty : 2 Medium
9/17/2013