1. The production possibility frontier will shift outward for all of the following reasons except:
a. an increase in the unemployment rate.
b. an increase in the labor force.
c. an improvement in technology.
d. an increase in worker productivity.
2. If there is a tremendous natural disaster, the effect can be shown by:
a. a point inside the production possibility frontier.
b. an outward shift of the production possibility frontier.
c. a movement from one point to another along the production possibility frontier.
d. an inward shift of the production possibility frontier.
3. Suppose that Indiana produces only steel and corn with fixed amounts of land, labor, and capital resources. Which of the following best reflects the potential for economic growth of the Indiana economy?
a. The unemployment rate in Indiana falls from 6% to 5%.
b. The midwestern U.S. experiences a devastating drought.
c. The percentage of Indiana residents with a college degree rises from 25% to 30%.
d. The U.S. imports more and more low-cost steel from Asian countries.
4.If this economy was producing on the production possibility frontier, and it wants to produce at point C, what needs to happen?
a. trade with another country
b. decrease in resources
c. decrease in production
d. elimination of unemployment