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MACROECONOMICS PARKIN 11TH EDITION PDF

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N. Gregory Mankiw Brief principles of macroeconomics pdf and three accompany Michael Parkin's Macroeconomics, Tenth Edition. The complete set of. Economics 11th Edition Michael Parkin Solutions Manual Microeconomics 11th Edition By Michael Parkin musicmarkup.info - Free download Ebook, Handbook. Parkin, Michael, –. Microeconomics/Michael Parkin. — 10th ed. p. cm. Includes index. Michael Parkin is Professor Emeritus in the Department of Economics at the University Microsoft® Word and Adobe® PDF files of the. Instructor's.

Macroeconomics test pdf Macroeconomics test pdf level course in macroeconomics. Macroeconomics 11th Edition by Michael Parkin pdf free. Visit our New Student Center to get a great overview of where to start. The farther away a country macroeconomlcs from its steady state, the higher its growth rate, as the productivity of capital is relatively high and thus foreign and national investors will invest. Please visit AP Central apcentral. His most recommended titles are the Principles series Principles of Microeconomics, Principles of Macroeconomics and Principles of Economics.

Denise Clinton, Publisher of MyEconLab has played a major role in the evolution of this text since its third edition, and her insights and ideas can still be found in this new edition. Donna Battista, Editor-in-Chief for Economics and Finance, is hugely inspiring and has provided overall direction to the project. Adrienne brings intelligence and insight to her work and is the unchallengeable pre-eminent economics editor.

Deepa Chungi, Development Editor, brought a fresh eye to the development process, obtained outstanding reviews from equally outstanding reviewers, digested and summarized the reviews, and made many solid suggestions as she diligently worked through the drafts of this edition. Deepa also provided outstanding photo research. Nancy Fenton, Managing Editor, managed the entire production and design effort with her usual skill, played a major role in envisioning and implementing the cover design, and coped fearlessly with a tight production schedule.

Lori Deshazo, Executive Marketing Manager, provided inspired mar- keting strategy and direction. Catherine Baum provided a careful, consistent, and intelligent copy edit and accuracy check. Jonathan Boylan designed the cover and package and yet again surpassed the challenge of ensuring that we meet the highest design standards. Joe Vetere provided endless technical help with the text and art files. Jill Kolongowski and Alison Eusden managed our immense supplements program.

And Heather Johnson with the other members of an outstanding editorial and production team at Integra-Chicago kept the project on track on an impossibly tight schedule. I thank all of these wonderful people. It has been inspiring to work with them and to share in creating what I believe is a truly outstanding educational tool.

I especially thank Mark Rush, who yet again played a crucial role in creating another edition of this text and package. Mark has been a constant source of good advice and good humor. I thank the many exceptional reviewers who have shared their insights through the various editions of this book.

Their contribution has been invaluable. I thank the people who work directly with me. Jeannie Gillmore provided outstanding research assistance on many topics, including the Reading Between the Lines news articles. Richard Parkin created the electronic art files and offered many ideas that improved the figures in this book. As with the previous editions, this one owes an enormous debt to Robin Bade. I dedicate this book to her and again thank her for her work. I could not have written this book without the tireless and unselfish help she has given me.

My thanks to her are unbounded. Classroom experience will test the value of this book. I would appreciate hearing from instructors and students about how I can continue to improve it in future editions.

Cohn, U. Miller, Wesleyan University xxxv Judith W. John Fisher College James E. Woolf, University of Vermont John T. Brazil, China, India, and Russia, poorer nations with a combined population that dwarfs our own, are growing rapidly and playing ever-greater roles in an expanding global economy. Reflective Thinking 5 The production possibilities frontier is the boundary between those combination of goods and services that can be A produced and those that can be consumed.

B consumed domestically and those that can be consumed by foreigners. C produced and those that cannot be produced.

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D consumed and those that cannot be produced. Conceptual Status: Reflective Thinking 6 The production possibilities frontier itself shows A the maximum amount of resources available at any given time. B combinations of goods and services that do not fully use available resources.

C the maximum rate of growth of output possible for an economy. D the maximum levels of production that can be attained. Reflective Thinking 7 The production possibilities frontier represents A the maximum amount of labor and capital available to society. B combinations of goods and services among which consumers are indifferent. C the maximum levels of production that can be attained.

D the maximum rate of growth of capital and labor in a country. A It reveals the maximum amount of any two goods that can be produced from a given quantity of resources. B Tradeoffs occur when moving along a PPF. C Production efficiency occurs when production is on the frontier itself. D Consumers will receive equal benefits from the two goods illustrated in the PPF. A the goods and services that people want from those that they do not want B the types of goods that can be attained from those that can't be attained C the quantities of goods and services that can be produced from those that cannot be produced D the combinations of goods that people value and those that they don't Answer: A our choice of the goods can be either on or within the production possibilities frontier B we can satisfy our all wants C the opportunity cost of another good is zero D we face a tradeoff and incur an opportunity cost Answer: Production Efficiency Skill: Reflective Thinking 11 Harry produces 2 balloon rides and 4 boat rides an hour.

Harry could produce more balloon rides but to do so he must produce fewer boat rides. A producing inside B producing on C producing outside D producing either inside or on Answer: A is at a point beyond the production possibilities frontier B is on the production possibilities frontier or inside it C is at any attainable point D is on the production possibilities frontier Answer: Reflective Thinking 13 A point outside a production possibilities frontier indicates A that resources are not being used efficiently.

B an output combination that society cannot attain given its current level of resources and technology. C that resources are being used very efficiently. D that both goods are characterized by increasing costs. Reflective Thinking 14 Which of the following is NOT illustrated by a production possibilities frontier? A scarcity B opportunity cost C necessity for choice D who gets the goods Answer: Reflective Thinking 15 A production possibilities frontier figure does NOT illustrate A the limits on production imposed by our limited resources and technology.

B the exchange of one good or service for another. C opportunity cost. D attainable and unattainable points. Analytical Status: B associated with unused resources. C attainable only if prices fall. D attainable only if prices rise. Reflective Thinking 17 Which of the following statements regarding the production possibilities frontier is true? A Points outside the frontier are attainable. B Points inside the frontier are attainable. C Points on the frontier are less efficient than points inside the frontier.

D None of the above because all of the above statements are false. Reflective Thinking 18 Jane produces only corn and cloth. Taking account of her preferences for corn and cloth A makes her production possibilities frontier straighter. B makes her production possibilities frontier steeper. C makes her production possibilities frontier flatter. D does not affect her production possibilities frontier. A the quantity of a good; the number of workers employed to produce the good B the quantity of a good; the price of the good C the quantity of a good; a weighted average of resources used to produce the good D the quantity of one good; the quantity of another good Answer: B the fact that there are only two goods in the diagram.

C technological progress. D the fact there are attainable and unattainable points. Reflective Thinking 21 The figure above shows Roger's production possibilities frontier. A attainable; efficient B attainable; inefficient C unattainable; inefficient D unattainable; efficient Answer: B 10 fewer tons of clothing.

C 5 more tons of clothing. D 5 fewer tons of clothing. Production Possibilities Skill: Analytical Skills 23 Suppose the country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved A the highest marginal benefit.

B production efficiency. C the lowest marginal cost. D the highest opportunity cost. B not being technologically efficient. C producing too much output. D fully utilizing all of its productive resources. Reflective Thinking 25 If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must A be using resources inefficiently today, but will be more efficient in the future.

B be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods. C must be producing outside the production possibilities frontier and will continue to do so in the future. D must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.

Reflective Thinking 26 A country that must decrease production of one good in order to increase the production of another A must be using resources inefficiently.

B must be producing on its production possibilities frontier. C must be producing beyond its production possibilities frontier. D must have private ownership of property. B the PPF curve will shift inward. C society's resources are being used to produce too many consumer goods. D economic policy must retard further growth of the economy. B unattainable. C inefficient. D equitable. Reflective Thinking 29 If production point is inside the production possibilities frontier A it is not possible to produce more of both goods B production is inefficient.

C in order to produce more of one good, less of the other must be produced. D production is in the "unattainable" region.

Reflective Thinking 30 If a society is operating at a point inside its production possibilities frontier, then this society's A resources are being inefficiently utilized.

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B production possibilities frontier will shift rightward. C resources are being used in the most efficient manner. D economy will grow too fast. This promise can be valid A if the United States is producing at a point on its production possibilities frontier. B if the United States is producing at a point inside its production possibilities frontier. C if the United States is producing at a point beyond its production possibilities frontier.

D only if the production possibilities frontier shifts rightward. Reflective Thinking 32 Using the production possibilities frontier model, unemployment is described as producing at a point A on the exact middle of the PPF curve.

B on either end of the PPF curve. C inside the PPF curve. D outside the PPF curve. Reflective Thinking 33 A reduction in the amount of unemployment A shifts the production possibilities frontier outward. B moves the economy's point of production closer to the production possibilities frontier.

C moves the economy's point of production along the production possibilities frontier. D moves the economy's point of production further away from the production possibilities frontier.

Reflective Thinking 34 A point inside a production possibilities frontier A could indicate that some resources are unemployed. B is unattainable. C is more efficient than points on the production possibilities frontier. D implies that too much capital and not enough labor are being used.

B is more efficient than a point on the production possibilities frontier. C reflects the fact that more technology needs to be developed to fully employ all resources. D implies that too much labor and not enough capital is being used. Reflective Thinking 36 Production points inside the production possibilities frontier A are unattainable.

B are attainable only with the full utilization of all resources. C are associated with unused or misallocated resources. D result in more rapid growth. Analytical Skills 37 When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point A where the slope of the PPF is positive.

B where the slope of the PPF is zero. C inside the PPF.

D outside the PPF. B outside its production possibilities frontier with respect to food, but inside with respect to high-technology goods.

C inside its production possibilities frontier with respect to food, but outside with respect to high-technology goods. D inside its production possibilities frontier. Analytical Skills 39 Sam's production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he A can increase production of both goods with no increase in resources.

B is fully using all his resources. C values good A more than good B. D values good B more than good A. Analytical Skills 40 A situation in which some resources are NOT fully utilized is represented in a production possibilities frontier diagram by A any point on either the horizontal or the vertical axis.

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B the midpoint of the production possibilities frontier. C a point outside the production possibilities frontier. D a point inside the production possibilities frontier. Which point in the diagram shows that resources to produce office buildings and housing are being misallocated, unused, or both? Which production point indicates that resources are NOT fully utilized or are misallocated? Analytical Skills 43 Refer to the production possibilities frontier in the figure above. Which production point is unattainable?

A b; unattainable. B c; unattainable. C e; inefficient. D c; inefficient. Analytical Skills 45 In the figure above, moving from production at point d to production at point a requires A technological change. B a decrease in unemployment. C decreasing the output of consumer goods in order to boost the output of capital goods. D both capital accumulation and a decrease in unemployment. Tradeoff Skill: Analytical Skills 46 Refer to the production possibilities frontier in the figure above.

Suppose a country is producing at point a. A d; must give up 20 million capital goods B e; is not operating efficiently C d; gives up 10 million consumer goods. D b; is producing at an inefficient point. Opportunity Cost Skill: Analytical Skills 47 Refer to the production possibilities frontier in the figure above.

If the country moves from point a to point c, the opportunity cost of the move is A 30 million capital goods. B 20 million capital goods.

C 10 million capital goods. D 10 million consumption goods. B a combination of goods and services that cannot be produced efficiently C all goods and services that are desired but cannot be produced due to scarce resources.

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D a production point that has underutilization of resources Answer: Analytical Skills 49 In the above figure, which point represents an unattainable production combination of the two goods?

B represented by a point outside a PPF. C a constraint that requires giving up one thing to get another. D a transaction at a price either above or below the equilibrium price. Reflective Thinking 52 When producing goods and services along a PPF, tradeoffs exist because A not all production is efficient. B society has only a limited amount of productive resources. C downloaders and sellers often must negotiate prices.

D human wants and needs are limited at a particular point in time. Tradeoffs Skill: Reflective Thinking 53 Considering a PPF with health care services on the vertical axis and other goods and services on the horizontal axis, the increasing production of health care services in the United States as a result of the aging population represents A a movement upward along the PPF.

B an outward shift of the PPF from the vertical axis. C an outward shift of the PPF from the horizontal axis. D a movement downward along the PPF. B a point outside the PPF. C a change in the slope of the PPF. D the negative slope of the PPF. A involves a tradeoff but does not incur an opportunity cost B involves an opportunity cost but no tradeoff C involves a tradeoff and incurs an opportunity cost D involves no tradeoff but it does incur an opportunity cost Answer: Opportunity Cost and Tradeoff Skill: Reflective Thinking 56 When we choose a particular option, we must give up alternative options.

A opportunity cost B comparative advantage C nonmonetary cost D absolute advantage Answer: Reflective Thinking 57 Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. A opportunity cost B explicit cost C implicit cost D discretionary cost Answer: B the amount of money lost by one individual in an exchange process so that another individual might gain.

C the highest-valued alternative that is forgone when choosing among various alternatives. D a situation in which one individual cannot have an absolute advantage over another individual in the production of all goods. Reflective Thinking 59 Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is A part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job.

B part of the opportunity cost of going to college. Their forgone earnings from not holding a full-time job are not part of the opportunity cost of attending college.

C not part of the opportunity cost of going to college, but their forgone earnings from not holding a full-time job are part of the opportunity cost of attending college.

D not part of the opportunity cost of going to college. Neither are their forgone earnings from not holding a full-time job. Reflective Thinking 60 If Sam is producing at a point on his production possibilities frontier, then he A cannot produce any more of either good.

B can produce more of one good only by producing less of the other. C will be unable to gain from trade. D is not subject to scarcity. D along the PPF where to gain more of one good it is necessary to give some of another good. Reflective Thinking 62 When moving along the production possibilities frontier, opportunity cost is measured as the A increase in the quantity produced of one good divided by the decrease in the quantity produced of another good. B decrease in the quantity produced of one good divided by the increase in the quantity produced of another good.

C quantity produced of one good divided by the quantity produced of another good. D quantity produced of one good multiplied by the quantity produced of another good. Reflective Thinking 63 While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be A bowed outward.

B bowed inward. C positively sloped. D a straight line. Analytical Skills 64 Opportunity cost is represented on the production possibilities frontier by A attainable and unattainable points.

B efficient and inefficient points. C the amount of good Y forgone when more of good X is produced. D technological progress. At another point along the same PPF, 30 tons of coffee and tons of bananas are produced. D 2 tons of bananas per ton of coffee. Analytical Skills 67 In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. A greater; less B less; greater C less; less D greater; greater Answer: At another point along the same PPF, 9 pizzas and 10 sandwiches can be produced.

Analytical Skills 69 At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. Given this information, which of the following combinations is unattainable? A 6 tons of grain and 18 cars B 4 tons of grain and 26 cars C 2 tons of grain and 27 cars D 7 tons of grain and 10 cars Answer: Analytical Skills 71 The table above lists six points on the production possibilities frontier for grain and cars.

From this information you can conclude that production is inefficient if this economy produces A 6 tons of grain and 18 cars. B 4 tons of grain and 26 cars.

C 2 tons of grain and 27 cars. D 8 tons of grain and 10 cars. Analytical Skills 72 The table above lists six points on the production possibilities frontier for grain and cars. What is the opportunity cost of producing the 5th ton of grain? A 16 cars per ton of grain B 6 cars per ton of grain C 3 cars per ton of grain D 2 cars per ton of grain Answer: What is the opportunity cost of producing the 26th car?

A 2 tons of grain per car B 4 tons of grain per car C 0. Which of the following statements is TRUE? A Producing 0 chocolate bars and cans of cola is both attainable and efficient. B Producing 20 chocolate bars and 80 cans of cola is attainable, but inefficient. C Producing 30 chocolate bars and 38 cans of cola is only attainable with an increase in technology.

D Producing 40 chocolate bars and 0 cans of cola is unattainable and inefficient. Analytical Skills 75 The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following is an example of a point that is inefficient? A 0 chocolate bars and cans of cola B 20 chocolate bars and 80 cans of cola C 32 chocolate bars and 40 cans of cola D 38 chocolate bars and 0 cans of cola Answer: What is the opportunity cost of one chocolate bar if Sweet-tooth Land moves from point C to point D?

Analytical Skills 77 The above table shows production points on Sweet-Tooth Land's production possibilities frontier. What is the opportunity cost of one can of cola if Sweet-tooth Land moves from point C to point B? Analytical Skills 78 The above table shows production points on Sweet-Tooth Land's production possibilities frontier.

Which of the following is an example of a point that is unattainable? A 0 units of good X and 40 units of good Y. B 6 units of good X and 28 units of good Y. C 10 units of good X and 16 units of good Y.

D 3 units of good X and 35 units of good Y. Analytical Skills 80 The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a production point that is inefficient? Analytical Skills 81 The above table shows production combinations on a country's production possibilities frontier.

Which of the following points signifies efficient production? A 12 B 6 C 3 D There is no opportunity cost when moving from one point to another along a production possibilities frontier so none of the above answers is correct.

Analytical Skills 83 The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of one unit of Y when the production of good Y increases from 16 to 28 units?

Analytical Skills 84 The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of increasing the production of X from 0 to 3 units? A is greater than at B is less than at C cannot be compared with D is the same as Answer: I The movement from point A to B shows that the economy has chosen to produce more jets.

II The movement from point C to D shows that the economy has chosen to produce more jets. The figure shows her possibilities frontier. If Molly goes to college, she will move from point M to point K. In terms of consumption goods, Molly's opportunity cost of going to college is A MK. B substitution options frontier. C production function. D opportunity cost curve. Analytical Skills 91 The figure above illustrates that if this country wishes to have F2 - F1 additional food by moving from point A to point B, it will A have to find additional workers, because the country already is operating on its production possibilities frontier.

B be unable to do so until additional technological progress is made. C have to sacrifice C1 - C2 clothing in order to free the resources necessary to produce the additional food. D require that all the unemployed resources in the country be put to work. B the opportunity cost of producing more computers decreases as more computers are produced. C computer technology is subject to the principle of decreasing costs.

D All of the above answers are correct. Analytical Skills 93 According to the figure above, the opportunity cost of producing another computer is A higher at A. B higher at B. C the same at every point along the frontier. D different at most points along the frontier but equal at points A and B because they are equally distant from the axes. Increasing Opportunity Cost Skill: A 4 million pounds of bananas and 4 million hats B 2 million pounds of bananas and 5 million hats C 0 pounds of bananas and 6 million hats D 1 million pounds of bananas and 3 million hats Answer: Analytical Skills 95 In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?

Analytical Skills 97 Jane produces only corn, measured in tons, and cloth, measured in bolts. For her, the opportunity cost of one more ton of corn is A the same as the opportunity cost of one more bolt of cloth. B the inverse of the opportunity cost of one more bolt of cloth. C the ratio of all the bolts of cloth she produces to all the tons of corn she produces. D the ratio of all the tons of corn she produces to all the bolts of cloth she produces.

Opportunity Cost is a Ratio Skill: Analytical Skills 98 The principle of increasing opportunity cost leads to A a production possibilities frontier PPF that is bowed inward from the origin. B a production possibilities frontier PPF that is bowed outward from the origin.

C an inward shift of the production possibilities frontier PPF. D an outward shift of the production possibilities frontier PPF. B consumers prefer about equal amounts of the different goods. C entrepreneurial talent is more abundant than human capital. D resources are used inefficiently. A Unemployment is inevitable. B Resources are not equally useful in all activities. C Technology is slow to change. D Labor is scarcer than capital. Reflective Thinking Increasing opportunity cost occurs along a production possibilities frontier because A resources are not equally productive in all activities.

B increasing wants need to be satisfied. C in order to produce more of one good decreasing amounts of another good must be sacrificed. D production takes time. Reflective Thinking Increasing opportunity cost while moving along a production possibilities frontier is the result of A taxes. B firms' needs to produce profits. C the fact that it is more difficult to use resources efficiently the more society produces. D the fact that resources are not equally productive in alternative uses.

Reflective Thinking Increasing opportunity cost implies that A producing additional units of one good results in proportionately smaller reductions in the output of the other good.

B producing additional units of one good results in increasing amounts of lost output of the other good. C the production possibilities frontier will be a straight line. D the society will be producing inside its production possibilities frontier.

B decreases in terms of the amount foregone of the other good. C remains constant. D cannot be determined. A might increase or decrease B remains the same C increases D decreases Answer: A increases B remains the same C decreases D increases and then decreases Answer: Reflective Thinking The production possibilities frontier bows outward because A opportunity costs are decreasing as the production of a good increases.

B opportunity costs are increasing as the production of a good increases. C opportunity costs are fixed as the production of a good increases. D resources are of uniform quality. B reach a maximum and then gradually decrease. C bow outward. D shift outward over time. Reflective Thinking A bowed outward production possibilities frontier occurs when A opportunity costs are constant.

B resources are not scarce. C as more of a good is produced, producing additional units of it require greater reductions in the other good. D the society is operating on the production possibilities frontier. Reflective Thinking When the production possibilities frontier bows outward from the origin, A some of society's resources are unemployed.

B opportunity costs are constant. C opportunity costs are increasing. D opportunity costs are decreasing.

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Analytical Skills The slope of a production possibilities frontier that displays increasing opportunity cost is A positive and constant. B negative and constant.

C steeper near the horizontal intercept than near the vertical intercept. D steeper near the vertical intercept than near the horizontal intercept. B the opportunity cost of producing corn decreases. C the U. PPF for corn and other goods and services shifts outward. Analytical Skills The fact that individual productive resources are NOT equally useful in all activities A implies that a production possibilities frontier will be bowed outward.

B implies that gain from specialization and trade is unlikely. C follows from the law of demand. D implies a linear production possibilities frontier. Communication Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two goods will be A a straight, downward-sloping line. B a straight, upward-sloping line.

C bowed outward. D All of the above are possible and more information is needed to determine which answer is correct. Remaining on the PPF, an increase of banana production to tons shows coffee production at 30 tons.

Still remaining on the PPF, coffee production at 10 tons allows banana production at tons. The opportunity cost of a ton of bananas is A constant because coffee production decreased by the same amount each time.

B decreasing, since the increase in banana production is less at each point considered. C 16 to 1, that is every 1 ton of coffee given up will result in 16 more tons of bananas. Analytical Skills The nation's production possibilities frontier is bowed outward. D There is not enough information to determine the answer. B feasible but would involve unemployed or misallocated resources.

C possible only if the economy produces with maximum efficiency. D possible only if there is inflation. Analytical Skills In the above table, the production of 3 pizzas and 35 cases of soda is A impossible unless more resources become available. Analytical Skills In the above table, the opportunity cost of the 2nd pizza is A 0 cases of soda per pizza.

B 15 cases of soda per pizza. C 95 cases of soda per pizza. D 80 cases of soda per pizza. B decreases. C does not change.

D initially increases then decreases. Analytical Skills As Rainclouds Inc. A decreases B depends on the initial quantity produced C increases D remains the same Answer: B represents a highly desirable output level in the long run, because it conserves scarce resources.

C represents either unemployed or inefficiently utilized resources. D represents the maximum sustainable output level for this nation in the long run. Analytical Skills The country whose production possibilities frontier is illustrated above is currently at position A on the production possibilities frontier.

If it wishes to move to position B, it will A find this change impossible to achieve given the resources it currently possesses. B have to employ all currently unemployed resources to accomplish this. C incur an opportunity cost of having to give up some butter in order to make the additional amount of guns desired. D be able to make the desired switch only if there is a significant improvement in the technology available to the nation.

B has an opportunity cost of one ton of guns per month. C requires an increase in technology. D is impossible. Analytical Skills In the figure above, which of the following movements has the largest opportunity cost? B increasing opportunity cost. C that technology is improving. D that productivity is falling. Analytical Skills In the figure above, A moving from point a to point b would require new technology.

B production at point b is efficient whereas production at point a is not efficient. C some resources must be unemployed at point c. A This situation illustrates increasing opportunity cost. B As a result, we should specialize in the production of DVD players. C The production possibilities frontier for computers and DVD players is a straight line. D DVD players will be more highly regarded by consumers than computers. Analytical Skills As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X A rises.

The opportunity cost of one more unit of good Y also rises. B rises. The opportunity cost of one more unit of good Y falls. C falls. The opportunity cost of one more unit of good Y rises. D falls. The opportunity cost of one more unit of good Y also falls.

More of good X must be given up per unit of good Y gained when moving from point b to point a than when moving from point c to point b. This fact A illustrates decreasing opportunity cost.

B illustrates increasing opportunity cost. C indicates that good X is more capital intensive than good Y. D indicates that good Y is more capital intensive than good X.

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Analytical Skills The figure above illustrates Mary's production possibilities frontier. If Mary wants to move from point b to point c, she must A improve technology. B increase the accumulation of capital. C give up some of good Y in order to obtain more of good X. D give up some of good X in order to obtain more of good Y. If Mary wants to move from point d to point c, she must A improve technology. B increase her accumulation of capital.

C give up some of good X in order to obtain more of good Y. D give up some of good Y in order to obtain more of good X. Analytical Skills The above figure illustrates Mary's production possibilities frontier. Which of the following movements show opportunity costs increasing? A point a to point b to point c B point a to point f C point f to point a D point c to point f to point d Answer: Analytical Skills Refer to the production possibilities frontier figure above.

Which of the following movements requires the largest opportunity cost, in terms of good X forgone, per extra unit of good Y? A from point e to point d B from point d to point c C from point c to point b D from point b to point a Answer: Which of the following movements requires the largest opportunity cost, in terms of good Y forgone, per extra unit of good X? A from point a to point b B from point b to point c C from point c to point d D from point d to point e Answer: The production of 7 units of X and 28 units of Y is A impossible given the available resources.

B possible but leaves some resources less than fully used or misallocated. C on the production possibilities frontier between points c and d. D on the production possibilities frontier between points b and c. As we increase the production of X, A the output of Y increases.

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B unemployment increases. C the opportunity cost of each new unit of X increases. D the opportunity cost of each new unit of X decreases. Analytical Skills If the United States can increase its production of automobiles without decreasing its production of any other good, the United States must have been producing at a point A within its PPF.

B on its PPF. C beyond its PPF. D None of the above is correct because increasing the production of one good without decreasing the production of another good is impossible. B efficient and attainable. C inefficient and not attainable. D inefficient and attainable. A 1 video tape per audio tape B 2 video tapes per audio tape C 14 video tapes per audio tape D There is no opportunity cost. Analytical Skills In the above figure, at point b what is the opportunity cost of producing 2 more audio tapes?

B producing more of one good is possible only if the production of some other good is decreased. C as few resources as possible are being used in production. D producing another unit of the good has no opportunity cost. B linear. C negatively sloped. D positively sloped Answer: Study Guide Question, Tradeoff Skill: B reflects the unequal application of technology in production. C illustrates the fact that no opportunity cost is incurred for increasing the production of the good measured on the horizontal axis but it is incurred to increase production of the good measured along the vertical axis.

D is due to the existence of increasing opportunity cost. Reflective Thinking Moving along a bowed-out PPF between milk and cotton, as more milk is produced the marginal cost of an additional gallon of milk A rises.

B does not change. D probably changes, but in an ambiguous direction. B when it produces inefficiently. C when its PPF is bowed out. D never. A attainable, attainable B attainable, unattainable C unattainable, attainable D unattainable, unattainable Answer: He works an 8- hour day, spending 5 hours picking fruit and 3 hours catching fish.

Calculate Abe's opportunity cost of a pound of fruit. A 6 minutes B 3 hours a day C 2 pounds of fish D 0. Analytical Skills In the figure above, if the quantity of yogurt produced increases from 2 gallons an hour to 3 gallons an hour, the opportunity cost of a gallon of yogurt in terms of ice cream is A half a gallon. B 1 gallon. C 3 gallons. D 4 gallons. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn.

The opportunity cost of producing a ton of beef is A 10 bushels of corn for Dag and 8 bushels of corn for Claire. B 5 bushels of corn for Dag and 2. C 20 bushels of corn for Dag and 50 bushels of corn for Claire. Analytical Skills Abe can catch 10 pounds of fish an hour or pick 10 pounds of fruit.

Zeb can catch 30 pounds of fish an hour or pick 20 pounds of fruit. A higher, lower B lower, higher C higher, higher D lower, lower Answer: B that arises from producing one more unit of a good or service.

C of a good or service that exceeds its benefit. D of a good or service divided by the number of units produced. Marginal Cost Skill: A opportunity cost of producing; increases as production B opportunity cost of producing; decreases as production C price that must be paid to consume; increases as consumption D price that must be paid to consume; decreases as consumption Answer: Reflective Thinking 3 Moving along a PPF, marginal cost is A the cost of producing the first unit of a good or service.

B the total cost, less the production of the other good or service. C greater than the opportunity cost. D equal to the opportunity cost of producing one more unit of a good or service. Reflective Thinking 4 The quantity of shoes produced is measured along the horizontal axis of a PPF and the quantity of shirts is measured along the vertical axis. As you move down toward the right along the PPF, the marginal cost of A shoes decreases. B shoes increases.

C shirts increases. D shoes and shirts is equal at the midpoint between the vertical and horizontal axis. Opportunity Cost and Marginal Cost Skill: B remains constant as more is produced. C decreases as more is produced. D decreases as marginal benefits decrease. Reflective Thinking 6 When the opportunity cost of producing more of a good is increasing, the marginal cost of producing more of the good is A decreasing.

B constant. C increasing. D More information is needed to answer the question. Reflective Thinking 7 A marginal cost curve A is upward sloping.

B shows that as more of a good is produced, opportunity costs of producing another unit increase. C is bowed inward so that its slope can become negative. D Both answers A and B are correct. What is the marginal cost of moving from 2 bushels to 3 bushels of beans? A 9 bushels of carrots per bushel of beans B 12 bushels of carrots per bushel of beans C 3 bushels of carrots per bushel of beans D 21 bushels of carrots per bushel of beans Answer: B stays the same as more computers are produced.

C decreases as more computers are produced. D is the same as the marginal cost of producing a television set. Analytical Skills 11 In the figure above, the marginal cost of the second computer is A 2 television sets per computer. B 3 television sets per computer. C 5 television sets per computer. D 30 television sets per computer. B 4 television sets per computer. C 20 television sets per computer. D 35 television sets per computer. Analytical Skills 13 Marginal cost curves slope A upward because of increasing opportunity cost.

B upward because of decreasing opportunity cost. C downward because of increasing opportunity cost. D downward because of decreasing opportunity cost. Reflective Thinking 14 Marginal benefit is the benefit A that your activity provides to someone else. B of producing a good or service when the total benefit from the good or service exceeds its total cost.