1. The question of how are goods and services are produced most closely addresses which of the following scenerios?
a) Should Ford build SUV's or luxury cars?
b) Should Ford use expensive robots or inexpensive Mexican autoworkers to produce SUV's?
c) Should contractors build residential housing or shopping malls?
d) Is income distributed fairly in the United States?
2. The main reason U.S farmers can produce more per farmer than farmers in China is that U.S farmers
a) have more land to work with.
b) have more labor to work with.
c) have more capital to work with
d) are better trained.
e) work harder and longer hours.
3. When all the available factors of production are "productively employed" the
a) economy is producing at a point within its Production Possibilities Frontier (PPF),
b) economy is producing at a point on its PPF.
c) economy is producing at a point beyond its PPF.
d) PPF dissapears
4. In order for Ireland to grow more potatos, wool production must decrease. If wool and potatoes were the only two goods Ireland could produce, this situation is an example of
a) a tradeoff.
b) zero opportunity cost.
c) opportunity benefit.
d) a free lunch.
e) all the above are correct.
5. Why is the Production Possibilities Frontier (curve) bowed out from the origin of its graph?
a) the bowed shape reflects constant opportunity costs.
b) the bowed shape reflects decreasing opportunity costs.
c) the bowed shape indicates that cost at first decreases at a decreasing rate, and then begins to decrease at an increasing rate
the bowed shape reflects increasing opportunity cost.