b. PPF bowed outward. c. need to select among the points making up the PPF. d. straight-line PPF. ANS: C PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension 56. If there is an increase in the amount of good B foregone as every additional unit of good A is produced, the PPF between goods A and B would a. be a straight line. b. be a bowed-outward curve. c. be a bowed-inward curve. d. not ANS: B PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Comprehension 57. A PPF is bowed outward as a result of a. constant opportunity costs. b. increasing opportunity c. decreasing opportunity costs. d. scarcity. e. choice. ANS: B PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension 58. A PPF is a straight line as a result of a. constant opportunity costs. b. increasing opportunity costs. c. decreasing opportunity costs. d. scarcity. e. choice. ANS: A PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Comprehension 59. In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an day, John can produce either 8 loaves of bread or 8 pounds of butter. The opportunity cost of producing 1 pound of butter is a. 1/3 hour for Andy and 1 hour for John. b. 1 hour for Andy and 1 hour for John. c. 3 loaves of bread for Andy and 1 loaf of bread for John. d. 1/3 loaves of bread for Andy and 1 loaf of bread for John. e. none of the above ANS: C PTS: 1 DIF: Difficulty: Challenging NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost
KEY: Bloom's: Application 60. An advance in technology commonly refers to the ability to produce a. the same output with a smaller quantity of resources. b. more output with a fixed quantity of resources. c. more output with a greater quantity of resources. d. both a and b e. both b and c ANS: D PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic LOC: DISC: Productivity and growth KEY: Comprehension Exhibit 2-4 61. Refer to Exhibit 2-4. The line joining points A and D is called the a. production function frontier. b. utility function. c. production possibilities frontier. d. demand curve. ANS: C PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Bloom's: Knowledge 62. Refer to Exhibit 2-4. This economy is productive a. efficient, if it operates at point B or C. b. efficient, if it operates at point A or D. c. inefficient, if it operates at A or D. d. inefficient regardless of the particular point. e. both a and b ANS: E PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic LOC: DISC: Efficiency and equity KEY: Bloom's: Application 63. Refer to Exhibit 2-4. The opportunity cost of moving from point A to point B is a. 60,000 copiers. b. 40,000 copiers. c. 20,000 copiers. d. 20,000 fax machines. e. 40,000 fax machines. ANS: C PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic LOC: DISC: Scarcity, tradeoffs, and opportunity cost KEY: Application 64. Refer to Exhibit 2-4. As more fax machines are produced, the opportunity cost of producing them a. increases. b. decreases. c. remains constant.