Question :
51) According to Figure 2.4, as the economy moves from : 1381035
51) According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A) decreases.
B) increases.
C) remains constant.
D) initially increases, then decreases.
52) According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A) increases.
B) decreases.
C) remains constant.
D) initially increases, then decreases.
53) Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A) a reduction in unemployment.
B) an improvement in technology.
C) an increase in economic growth.
D) a change in society’s preferences for motorcycles versus hybrid cars.
Refer to the information provided in Figure 2.5 below to answer the questions that follow.
Figure 2.5
54) Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A) 90 LCD televisions that must be forgone to produce 20 additional plasma televisions.
B) 30 LCD televisions that must be forgone to produce 60 additional plasma televisions.
C) 120 LCD televisions that must be forgone to produce 40 additional plasma televisions.
D) 30 LCD televisions that must be forgone to produce 20 additional plasma televisions.
55) Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A) -2/3.
B) -1.5.
C) -3.
D) -30.
56) Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 plasma televisions could be produced, production of LCD televisions would have to be reduced by
A) exactly 30.
B) fewer than 30.
C) more than 30.
D) exactly 60.
57) Refer to Figure 2.5. The best point for society would be
A) Point C, as at this point there are approximately equal amounts of LCD and plasma televisions being produced.
B) either Point B or Point C, as the total amount being produced at either of these points is approximately the same.
C) at any of the labeled points, as all of the points represent an efficient allocation of resources.
D) indeterminate from this information, as we don’t have any information about the society’s desires.
58) If the opportunity costs of producing a good increase as more of that good is produced, the economy’s production possibility frontier will be
A) negatively sloped and “bowed inward” toward the origin.
B) negatively sloped and “bowed outward” from the origin.
C) a negatively sloped straight line.
D) a positively sloped straight line.
59) As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A) increases.
B) decreases.
C) initially increases, then decreases.
D) initially decreases, then increases.
60) As more of a good, such as television sets, is produced, the opportunity costs of producing it increases. This most likely occurs because
A) as more of a good is produced, the inputs used to produce that good will increase in price.
B) consumers would be willing to pay higher prices for the good as more of the good is produced.
C) resources are not equally well suited to producing all goods, and as more of a good is produced, it is necessary to use resources less well suited to the production of that good.
D) as more of a good is produced, the quality of that good declines, and therefore the costs of production increase.
