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71) Refer to the above figure. Which of the following statements is TRUE?

A) Panel A does not represent an economy that is producing efficiently while Panel B does.

B) Panel A represents an economy that has a lower level of technology than Panel B.

C) Opportunity costs do not apply to Panel A but apply to Panel B.

D) In Panel A, equal amounts of Y must be given up to obtain equal increments of X while in Panel B increasingly greater amounts of Y must be given up to obtain equal increments of X.

 

72) The bowed shape of the traditional production possibilities curve reflects the

A) negative side effects of economic growth.

B) fact that not all resources are equally well-suited to producing all goods.

C) costs of unemployment.

D) problems of inequality.

 

 

73) Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?

A) Point C cannot be produced.

B) The best production point is 500 loaves of bread and 50 bales of wool.

C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.

D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.

 

74) Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?

A) Starting from point A, this economy does not incur any opportunity cost in producing more bread.

B) Starting from point A, this economy does not incur any opportunity cost in producing more wool.

C) In moving from point A to point B, the economy produces 30 additional bales of wool at an opportunity cost of 250 loaves of bread.

D) In moving from point A to point B, the economy is experiencing economic growth.

75) Refer to the above figure. How do you describe what is happening as the economy moves from point C to point B?

A) Previously unemployed resources are now being devoted to the production of wool.

B) Previously unemployed resources are now being devoted to the production of bread.

C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread.

D) The economy has acquired new resources for making bread.

 

76) Refer to the above figure. How do you describe what is happening as the economy moves from point A to point B?

A) The economy has acquired new resources that are well suited for producing wool.

B) Land that was once used to grow wheat is now being used to graze sheep.

C) The economy is producing more bread by choosing to produce less wool.

D) The technology for growing wheat has improved.

 

77) Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?

A) The economy has acquired new resources that are well suited for producing bread.

B) Land that was once used to graze sheep is now being used to grow wheat.

C) Resources are becoming unemployed.

D) The technology for growing wheat has improved.

 

78) During periods of unemployment

A) the economy operates at a point inside the production possibilities curve.

B) the economy operates at a point outside the production possibilities curve.

C) the production possibilities curve shifts inward.

D) the production possibilities curve shifts outward.

79) As an economy moves from point to point along its production possibilities curve, which one of the following variables changes?

A) the total amount of resources employed

B) the level of technology

C) the time frame under consideration

D) the amount of each good or service produced

 

80) Technology

A) is constantly changing at every point along a production possibilities curve.

B) is the recipe for combining land, labor, physical capital, and entrepreneurship to produce a good.

C) does not have an effect on the amount of a good a society can produce with its given resources.

D) only changes if resources change.

 

 

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