Question :
10) The above figure shows the PPF for a country : 1240766
10) The above figure shows the PPF for a country that produces computers and computer factories. Which of the following would most likely shift the PPF from PPF0 in one year to PPF1 in the next?
A) Nothing, because the PPF does not shift.
B) Increase the production of computers from 9 million (at point C) to 11 million (at point B).
C) Decrease the production of computers from 11 million (at point B) to 9 million (at point C) and build 9 new computer factories.
D) Increase consumption of both computers and computer factories.
E) Decrease production of both computers and computer factories by moving into the interior of the PPF.
11) The above figure shows the PPF for a country that produces computers and computer factories. The nation’s production possibilities frontier is PPF0 . At which of the following production points would the economy grow most rapidly?
A) Point A
B) Point B
C) Point C
D) It makes no difference among the three points because they are all production efficient.
E) More information is needed to answer the question.
12) Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas. Hotels are a capital good that,once built, will help produce still more consumption goods. If Puerto Rico produces more hotels than Hawaii,
A) Hawaii’s PPF will shift outward further than Puerto Rico’s PPF.
B) Hawaii’s PPF will shift inward.
C) Puerto Rico’s PPF will not shift.
D) Puerto Rico’s and Hawaii’s PPF will shift outward by the same amount.
E) Puerto Rico’s PPF will shift outward further than Hawaii’s PPF.
13) Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas. Hotels are a capital good that,once built, will help produce still more consumption goods.. According to the figure, which island will have more rapid economic growth?
A) Hawaii
B) Both Hawaii and Puerto Rico will grow at the same speed.
C) Puerto Rico
D) Neither Hawaii nor Puerto Rico will grow.
E) More than one of the above answers is correct.
14) Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, which is India’s most likely future PPF?
A) PPF2
B) PPF1
C) PPF0
D) either PPF0 or PPF1
E) None of the above because economic growth will not happen in India.
15) Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, which is France’s most likely future PPF?
A) PPF2
B) PPF1
C) PPF0
D) either PPF0 or PPF1
E) None of the above because economic growth will not happen in India.
16) Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, India’s most likely future PPF is ________, and France’s most likely future PPF is ________.
A) PPF1; PPF1
B) PPF2; PPF2
C) PPF0; PPF0
D) PPF2; PPF1
E) PPF1; PPF2
17) Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, which country is most likely to expand its PPF to PPF3?
A) India
B) Germany
C) Estonia
D) France and Germany equally
E) France
18) Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, which country is most likely to expand its PPF to PPF1?
A) France and Germany equally
B) India
C) Estonia
D) France
E) Germany
19) Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, India is most likely to expand its PPF to
A) PPF3 or PPF2.
B) PPF3.
C) PPF1.
D) PPF1. or PPF2.
E) PPF2.
20) Suppose that Germany, France, Estonia, and India all have the same production possibilities, illustrated in the figure above. Based on the production points in the figure, Germany is most likely to expand its PPF to
A) PPF3 or PPF2.
B) PPF3.
C) PPF1.
D) PPF1. or PPF2.
E) PPF2.
