Question : 31) If an economy fully utilizing its resources, it can : 1381324

 

31) If an economy is fully utilizing its resources, it can produce more of one product only if it

A) doubles manufacturing of the product.

B) produces less of another product.

C) adds more people to the labor force.

D) reduces the price of the most expensive products.

Refer to the information provided in Figure 2.2 below to answer the questions that follow.

 

 

Figure 2.2

 

32) Refer to Figure 2.2. Full resource employment and production efficiency is represented by a point

A) inside the production curve.

B) along the production curve.

C) outside the production curve.

D) either inside or along the production curve.

 

33) Refer to Figure 2.2. You correctly deduce that all resources are fully employed and there are no production inefficiencies if this economy is currently operating at a point

A) inside the production curve.

B) along the production curve.

C) outside the production curve.

D) either inside or along the production curve.

34) All the combinations of goods and services that can be produced if all of society’s resources are used efficiently are represented on an economy’s

A) production possibility frontier.

B) resource availability diagram.

C) factors of production statement.

D) allocative allotment graph.

 

35) When an economy is producing inside its production possibility frontier

A) production inefficiency occurs.

B) only technological advances will allow it to increase production.

C) it is efficient so long as it is producing what people want.

D) it must overcompensate by producing outside the curve to achieve efficiency.

 

36) If an economy is producing on its production possibility frontier but is not producing what people want, the economy

A) is experiencing technological advancement.

B) is producing at more than one point on the production possibility frontier.

C) is not being allocatively efficient.

D) is not being productively efficient.

 

37) If a society is producing at a point along its production possibility frontier, then the society

A) is fully employing its resources so it must be allocatively efficient.

B) is fully employing its resources, but not necessarily being allocatively efficient.

C) is underallocating resources so it must be inefficient.

D) is overallocating resources so efficiency is indeterminate.

38) If an economy begins to use its resources less efficiently, it will move

A) to a point closer to its ppf.

B) to a point farther away from its ppf.

C) from a point along its ppf to a point outside its ppf.

D) from one point to another point along its ppf.

 

39) The value of the slope of a society’s production possibility frontier is called its

A) value of diminishing efficiency.

B) marginal rate of substitution.

C) marginal rate of transformation.

D) diminishing opportunity cost of capitalization.

 

40) Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of wine is

A) the 2 gallons of beer that must be forgone.

B) the 2 gallons of wine that must be forgone.

C) the 0.5 gallons of beer that must be forgone.

D) the additional 0.5 gallons of beer that can be produced.

 

 

 

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