Question : 3.1   Production Possibilities 1) The United States produced approximately ________ worth : 1240760

3.1   Production Possibilities

1) The United States produced approximately ________ worth of goods and services in 2011.

A) $15 trillion

B) $15 billion

C) $150 trillion

D) $150 billion

E) $1,500 trillion

2) Which of the following is an assumption used when drawing a production possibilities frontier?

i.Human wants and desires are limited to what is available.

ii.Only two goods are considered.

iii.The level of technology is fixed and unchanging.

A) i only

B) ii only

C) i and iii

D) ii and iii

E) i, ii, and iii

3) In the production possibilities model, the vertical axis measures ________ and the horizontal axis measures ________.

A) the quantity of a good or service; the quantity of another good or service

B) the price of a good or service; the quantity of the good or service

C) the price of a good or service; the price of another good or service

D) the quantity of a good or service; time

E) people’s wants; the quantity of a good or service

4) The production possibilities frontier illustrates the

A) maximum combinations of goods and services that can be produced.

B) resources the economy possess, but not its level of technology.

C) goods and services that people want.

D) limits to people’s wants.

E) amount of each good that people want to buy.

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

A) the amount of money in the economy

B) the available factors of production and the state of technology

C) the prices of goods and services

D) the quantity of the goods and services that are produced

E) None of the above because nothing is held constant when drawing the production possibilities frontier.

6) A production possibilities frontier shows

A) the various combinations of output a nation can produce a certain time, given its available resources and technology.

B) the limits to future growth of a nation.

C) how money can be allocated among two kinds of goods.

D) that if price of one good decreases, the price of the other has to increase.

E) that it is impossible to produce inefficiently.

7) The production possibilities frontier is the

A) maximum output that can be produced at an opportunity cost of zero.

B) minimum output that can be produced when resources are used inefficiently.

C) 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.

D) boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced when technology is changing.

E) maximum opportunity cost combinations of goods and services.

8) The production possibilities frontier is the boundary between the

A) goods and services that the economy can produce.

B) attainable and unattainable combinations of goods and services.

C) wanted and unwanted combinations of goods and services.

D) rational and irrational choices facing a society.

E) affordable and unaffordable combinations of production.

9) Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis. As the country moves along the frontier closer to the horizontal axis,

A) more jeans are produced.

B) the country eventually chooses an unattainable point.

C) free lunches occur.

D) more tradeoffs occur.

E) more shoes are produced.

10) While moving along a production possibilities frontier, the amount of labor ________, the amount of capital ________, and the level of technology ________.

A) is fixed; is fixed; varies

B) varies; is fixed; varies

C) varies; is fixed; is fixed

D) is fixed; is fixed; is fixed

E) varies; varies; varies