Question : 51) A point lying inside the production possibilities boundary one : 1384119

51) A point lying inside the production possibilities boundary is one at which

A) there is no scarcity.

B) the opportunity cost of producing more output is negative.

C) it is not possible to produce more output with existing resources.

D) the economy has run out of resources.

E) more output could be produced with existing resources.

52) If a country’s production possibilities boundary is drawn as a straight (downward-sloping) line it indicates

A) decreasing opportunity cost of producing more of either good.

B) the use of the scarce resources in an economy.

C) constant opportunity cost of producing more of either good.

D) an unfair distribution of resources in an economy.

E) increasing opportunity cost of producing more of either good.

53) Refer to Figure 1-4. The production possibilities boundaries are drawn concave to the origin. What does this shape of the PPB demonstrate?

A) the decreasing opportunity cost of producing more of either good

B) the scarcity of resources in the economy

C) the constant opportunity cost of producing more of either good

D) the unfair distribution of resources in the economy

E) the increasing opportunity cost of producing more of either good

54) Refer to Figure 1-4. If Country X, constrained by the production possibilities boundary PPB1, is producing the combination of goods indicated at point F, it can produce more consumer goods by moving to one of the points

A) A or E.

B) D or E

C) A, B, or C.

D) A or B, but not C.

E) A, B, C, D, or E.

55) Refer to Figure 1-4. If Country X is currently producing at point A, it could move to point B if

A) the cost of producing capital goods were to increase.

B) some resources were switched from the capital goods industries to the consumer goods industries.

C) the cost of producing consumer goods were to increase.

D) some resources were switched from the consumer goods industries to the capital goods industries.

E) Country X is no longer able to produce the quantity of capital goods at point A.

56) Refer to Figure 1-4. If Country X were producing at point C,

A) the opportunity cost of moving to point B is to give up some consumption goods.

B) the opportunity cost of moving to point A is zero.

C) the opportunity cost of moving to point A is to give up some capital goods.

D) this is the maximum output possible from given resources.

E) it is not possible to move to any point on PPB1 or PPB2 without technological progress.

57) Refer to Figure 1-4. At point B,

A) the price of capital goods is higher than the price of consumer goods.

B) Country X is producing too many consumer goods and too few capital goods.

C) the price of consumer goods is equal to the price of capital goods.

D) the opportunity cost of producing an extra unit of capital goods is higher than at point A.

E) the opportunity cost of producing an extra unit of consumer goods is higher than at point A.

58) Refer to Figure 1-4. If Country X, constrained by the production possibilities boundary PPB1, is currently producing at point A, it can produce more capital goods by moving to point

A) F.

B) E.

C) D.

D) C.

E) B.

59) Refer to Figure 1-4.  Suppose that Country X is currently producing at point E. Country X could achieve production at point D if

A) the given resources were fully employed.

B) the given resources were more efficiently employed.

C) sufficient improvements in technology occurred in either the capital goods industry or the consumer goods industries.

D) firms reduced output of capital goods.

E) the prices of capital goods and consumption goods fell.

60) Refer to Figure 1-4. A shift of the production possibilities boundary from PPB1 to PPB2 implies

A) a movement from full employment to some unemployment.

B) that if point E is the new choice of outputs, productivity has increased in the consumer goods industry.

C) that technology in the capital goods industries has improved.

D) an inevitable decrease in total output.

E) that technology in the consumer goods industry has improved.