ECON 2001.01 Chapter Production Possibilities: Production Possibilities Textbook Notes

73 views8 pages

beigecod616

10 Sep 2018

School

Ohio State University

Department

Economics

Course

ECON 2001.01

Professor

Jeffrey Buser

For unlimited access to Textbook Notes, a Class+ subscription is required.

blackbuffalo693 and 67 others unlocked

ECON 2001.01 Full Course Notes

Verified Note

57 documents

Document Summary

Resources a scarcity production possibility schedule efficient in the levels using all available effective way most resources boundary between what is possible impossible to produce production. Output levels inside inefficient curve are every level is curve of production outside impossible curve the possibilities shows frontier opportunity cost next production ppf best alternative. 1lb 024lb a scarce law cost are resources. Increases potential living rise output right price the must workers be greater opportunity than cost lower than my opportunity cost. Mfffortunity pc so cost buyer price p bargaining skills opportunity resources costs are increase the same bc not all when. Ppf opportunity looks like costs increases a bowed out curve flow global monetary payments purchase consumption for a payment flow circular goods services flow back. Dresource f firing product market a for someone us else model resources a money forth an economy in.

Related Questions

A bowed out PPF reflects which of the following ideas?

i.increasing opportunity cost

ii. resources are not equally productive in all activities

iii. prices of goods increase over time

		I only
		I and iii
		ii and iii
		I and ii

1 point

QUESTION 2

With no international trade, a country ________ consume at a point outside of its PPF; with international trade, a country ________ consume at a point outside of its PPF.

		can; cannot
		cannot; can
		cannot; cannot
		can; can

1 point

QUESTION 3

If the production possibilities frontier between two goods is a straight line, then the

		the line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
		opportunity cost is not a ratio.
		increasing opportunity costs.
		resources are equally productive in both goods.

1 point

QUESTION 4

As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good?

		It might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		It decreases.
		It increases.
		It remains constant.

1 point

QUESTION 5

"Comparative advantage" is defined as a situation in which one person can produce

		more of a good than another person.
		a good for a lower dollar cost than another person.
		a good for a lower opportunity cost than another person.
		more of all goods than another person.

1 point

QUESTION 6

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost

		increases.
		decreases.
		might increase, decrease, or remain constant depending on how much people value the additional units of the good.
		remains constant.

1 point

QUESTION 7

A bowed out production possibility frontier shows that the

		opportunity cost relationship is linear.
		the opportunity cost of a good is constant as more of the good is produced.
		the opportunity cost of a good increase as more of the good is produced.
		the opportunity cost of a good decrease as more of the good is produced.

1 point

QUESTION 8

Which of the following statements is correct?

		The production possibilities frontier shows that there are no limits to production.
		Any point on or within the PPF is production efficient.
		If capital is idle, the economy is producing at its full potential.
		A tradeoff is a limit that forces an exchange or a substitution of one thing for something else.

1 point

QUESTION 9

A major earthquake occurs in the central part of the United States. What impact would this have on the nation's production possibilities frontier and why?

		A tradeoff would occur to replace the resources and goods destroyed.
		It would shift inward because some of the nation's resources, such as capital and labor, would be destroyed.
		It would shift outward because unemployment would be reduced.
		Nothing would happen because the nation would still have the same capabilities.

1 point

QUESTION 10

When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods

		must increase.
		must decrease.
		must remain the same.
		must change but they might increase or decrease.

1 point

QUESTION 11

Moving along a country's PPF, a reasonable opportunity costs increase is that

		unemployment increases as a country produce more and more of one good.
		unemployment decreases as a country produces more and more of one good.
		some resources are better suited for producing one good rather than the other.
		technology declines as a country produce more and more of one good.

1 point

QUESTION 12

A reason the production possibilities frontier exists is

		scarcity of resources and unlimited technology.
		unemployment.
		scarcity of resources.
		unlimited resources and technology.

1 point

QUESTION 13

Moving from one point to another on a production possibilities frontier implies

		increasing the production of one good and decreasing the production of another.
		increasing the production of both goods.
		decreasing the production of both goods.
		holding the production levels of both goods constant.

1 point

QUESTION 14

Specialization and trade make a country better off because with trade the country can consume at a point

		outside its production possibilities frontier.
		on its trading partner's production possibilities frontier.
		inside its production possibilities frontier.
		on its production possibilities frontier.

1 point

QUESTION 15

The production possibilities frontier is the

		the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing.
		the minimum output that can be produced when resources are used inefficiently.
		the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.
		maximum output that can be produced at an opportunity cost of zero.

1 point

QUESTION 16

The opportunity cost of economic growth is ________ and the benefit of economic growth is ________.

		decreased current consumption; decreased future consumption
		decreased current consumption; increased future consumption
		increased current consumption; increased future consumption
		increased current consumption; decreased future consumption

1 point

QUESTION 17

In terms of a nation's production possibilities frontier, what impact does international trade have?

		International trade shifts the nation's production possibilities frontier outward.
		International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported.
		International trade shifts the nation's production possibilities frontier inward.
		International trade allows the nation to consume at a point outside its production possibilities frontier.

1 point

QUESTION 18

The production possibilities frontier illustrates the

		goods and services that people want.
		limits to people's wants.
		resources the economy possesses, but not it is the level of technology.
		maximum combinations of goods and services that can be produced.

1 point

QUESTION 19

As we move along the production possibilities frontier,

		the possibilities of tradeoffs diminish.
		the production of one good increases as the production of the other good decreases.
		more of both goods can be produced.
		a tradeoff is not possible because nations need all goods.

1 point

QUESTION 20

What is the opportunity cost of economic growth?

		Eliminate scarcity
		Land.
		Capital goods.
		Consumption of goods.

1 point

QUESTION 21

Which of the following statements is correct?

i.As the economy grows, the opportunity costs of economic growth decrease.

ii. Economic growth has no opportunity cost.

iii. The opportunity cost of economic growth is current consumption forgone.

		ii only
		iii only
		I only
		I and iii

1 point

QUESTION 22

Does economic growth depend upon which of the following?

i. Increasing the quantity of labor.

ii. Lowering the prices of goods and services.

iii. Advancing technology.

		ii only.
		I only.
		I and iii.
		iii only.

1 point

QUESTION 23

When drawing a production possibilities frontier, which of the following is held constant?

		the amount of money in the economy
		the prices of goods and services
		the quantity of the goods and services that are produced
		the available factors of production and the state of technology

1 point

QUESTION 24

To increase its economic growth, a nation should

		encourage spending on goods and services.
		increase in current consumption.
		encourage education because that increases the quality of labor.
		limit the number of people in college because they produce nothing.

1 point

QUESTION 25

The opportunity cost of one more slice of pizza in terms of sodas is the

		some pizza slices we have to give up to get one extra soda.
		the total number of sodas that we have divided by the total number of pizza slices that we have.
		the total number of pizza slices that we have divided by the total number of sodas that we have.
		the number of sodas we have to give up to get one extra pizza slice.

jadecrow966

Type of production A B C D E
Automobiles 0 2 4 6 8
Forklifts 30 27 21 12 0

To the above is a production possibilities table for consumer goods (automobiles) and capital goods ( forklifts):

a) Show this data graphically. upon what specific assumptions is this possibility curved based?
B) If the economy is at point c, what is the cost of one more automobile? of one more forklifts? which characteristics of the production curve reflects the law of increasing opportunity costs: its shape or its length?
c) If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources?
d) Is a production at a point outside the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve? Could international trade allow a country to consume beyond its current production possibilities curve?

rubymosquito820

1.Production efficiency.

A)state the condition for production in terms of which slopes are equal. use terms such as MRS,MRTS,MRT,and/or - P horizontal/P vertical P horizontal refers to the price of the good on the horizontal axis. Use subscripts and/or superscripts on MRS and MRTS as appropriate. In this case, P horizontal is the cost of labor (w)and P vertical is the cost of capital(r)

B) Draw an Edgeworth box for production efficiency. The K and L isoquants should show both inefficient ( crossing and efficient ( tangent) relationships.

C) Explain why points at isoquant intersection are inefficient. This answer has nothing to do with the answer to 1a above. The answer to this question is not whether the curves cross or are tangent but rather what happens to production levels at the same cost as production is moved to an efficient point on the contract curve.

D) State two governmental policies which could cause the production mix to remain at an inefficient point. This is the same as saying what policies could prevent the prices of the two factors of production(w/r) from adjusting to offer the same relative cost of inputs to all producers.

ECON 2001.01 Chapter Production Possibilities: Production Possibilities Textbook Notes

ECON 2001.01 Full Course Notes

Document Summary

Get access

Related Documents

ECON 2001.01 Chapter 3: ECON2001.01, Ch 3

ECON 2001.01 Lecture Notes - Lecture 2: Tesla Model X, Marginal Cost, Opportunity Cost

ECON 2001.01 Chapter Notes - Chapter 2: Comparative Advantage, Opportunity Cost, Absolute Advantage

Related Questions