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AP Classroom: Assume an economy produces two goods, capital goods, and consumer goods. If the production of capital goods increases in the current period, which of the following will occur for the current future production (PPQ) for consumer goods and capital goods?

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Related questions

Suppose an economy produces only two goods, consumer goods, and capital goods. Its current combination of production involves a higher level of capital goods than consumer goods. What can be inferred from this current choice on its production possibilities curve?

That its ____ choice in production may result in ____ future prospects for economic growth.

MULTIPLE CHOICE QUESTIONS:

Note: Price elasticity of demand is given as an absolute value throughout.

The production possibility frontiers for Arboc and Arbez are shown below. Use this information for the next nine questions.

1. Which of the following is most likely to shift out the Arbocali production possibility frontier?
A. An increase in the general educational level of the Arbocali labor force.
B. An increase in the income of Arbocali consumers.
C. An increase in the purchase of stocks on the Arbocali Stock Exchange.
D. A reallocation of resources toward consumer goods.

2. If the Arbocali economy moves from Point A to Point B, the opportunity cost would be
A. 30 consumer goods.
B. 20 capital goods.
C. 40 capital goods.
D. 10 consumer goods.

3. If the Arbocali economy moved from Point A to Point B, we would expect
A. a decreased standard of living in the future as consumption has decreased.
B. increased unemployment in the future.
C. decreased unemployment in the future.
D. the economy to grow more rapidly in the future

4. Arbez is currently producing 25 consumer goods and 60 capital goods. If Arbez increases capital good production to 75, the opportunity cost will be
A. 15 consumer goods.
B. 0 consumer goods.
C. 5 consumer goods.
D. 10 consumer goods.

5. Both Arboc and Arbez are producing 30 consumer goods and each is on its production possibility frontier. We can conclude that
A. Both economies will grow equally rapidly.
B. Arboc will grow more rapidly than Arbez.
C. Arbez will grow more rapidly than Arboc.
D. Arboc is currently experiencing a higher rate of unemployment than Arbez.

6. Arbez becomes able to increase its maximum output of consumer goods. This indicates that the opportunity cost of consumer goods in Arbez has
A. decreased and the opportunity cost of capital goods has remained unchanged.
B. increased and the opportunity cost of capital goods has decreased.
C. increased and the opportunity cost of capital goods has remained unchanged.
D. decreased and the opportunity cost of capital goods has increased.

7. Arbez

""Please answer with simple explanations""

1. The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy.

Production alternative

Product A B C D E

Capital Goods 0 1 2 3 4

Consumer Goods 22 18 13 7 0

What is the total opportunity cost of producing the second unit of capital goods?

a. 4 units of consumer goods

b. 5 units of consumer goods

c. 9 units of consumer goods

d. 13 units of consumer goods

2. The U.S. and the U.S.S.R

a. Evolved in part from the same philosophical origins

b. Shared Veblin as their intellectual inspiration

c. Produced and distributed output according to the principal of relative depravation

d. Did not share scarcity as their fundamental economic problem

3. From the economist

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