EC120 Midterm: samplemidterm2-2017

Al. Consider the production possibilities boundary (PPB) of an economy. Economic growth is illustrated by (A) (B) (C) an outward shift of the PPB. the movement to a point outside of the PPB. a movement onto the PPB. the negative slope of the PPB. a movement along the PPB. (D) (E)

Capital Goods Consumer Goods FIGURE 1-3 2) Refer to Figure 1-3. Suppose that the relevant production possibilities boundary is the one labeled B. This boundary implies that A) the concept of opportunity cost is not at work in this economy. B) the opportunity cost of producing either capital goods or consumer goods does not depend on how much of each good is produced. C) consumer goods are preferred to capital goods. D) in this society the resources are not efficiently employed. E) capital goods are preferred to consumer goods.

14) Which one of the following concepts is not illustrated by a production possibilities curve? A) scarcity B) monetary exchange C) opportunity cost D) attainable and unattainable points E) the tradeoff between producing one good versus another Use the figure below to answer question 15.