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The opportunity cost of one more slice of pizza in terms of sodas is the total number of pizza slices that we have divided by the total number of sodas that we have

The opportunity cost of one more slice of pizza in terms of sodas is the

   

total number of pizza slices that we have divided by the total number of sodas that we have.

   

number of sodas we have to give up in order to get one extra pizza slice.

   

number of pizza slices we have to give up in order to get one extra soda.

   

total number of sodas that we have divided by the total number of pizza slices that we have.

1 points

QUESTION 2

A production possibilities frontier shows

   

how money can be allocated among two kinds of goods.

   

the limits to future growth of a nation.

   

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

   

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

1 points

QUESTION 3

When a production possibilities frontier is bowed outward, as more of one good is produced, its opportunity cost

   

remains constant.

   

might increase, decrease, or remain constant depending on how much people value the additional units of the good.

   

increases.

   

decreases.

1 points

QUESTION 4

When all of the available factors of production are being efficiently employed, the

   

economy is producing at a point within its PPF.

   

PPF disappears.

   

economy is producing at a point beyond its PPF.

   

economy is producing at a point on its PPF.

1 points

QUESTION 5

If a nation devotes a larger share of its current production to consumption goods, then

   

its PPF will shift inward.

   

its economic growth will slow down.

   

its PPF will shift outward.

   

some productive factors will become unemployed.

1 points

QUESTION 6

A point on the production possibilities frontier reflects an

   

attainable point with full employment of all resources.

   

attainable point without full employment of all resources.

   

unattainable point without full employment of all resources.

   

unattainable point with full employment of all resources.

1 points

QUESTION 7

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

   

the available factors of production and the state of technology

   

the amount of money in the economy

   

the prices of goods and services

   

the quantity of the goods and services that are produced

1 points

QUESTION 8

As we move along the production possibilities frontier,

   

more of both goods can be produced.

   

the possibilities of tradeoffs diminish.

   

a tradeoff is not possible because nations need all goods.

   

the production of one good increases as the production of the other good decreases.

1 points

QUESTION 9

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.

   

i and iii

   

ii only

   

i, ii, and iii

   

i only

1 points

QUESTION 10

To achieve gains from trade, a country

   

needs to have an absolute advantage in the production of all goods.

   

specializes in the producing a good in which it has a lower opportunity cost.

   

must produce at a point beyond its PPF.

   

should produce at the midpoint of its PPF.

1 points

QUESTION 11

Relative to Al, Joe has ________ if Joe can produce a good at a lower opportunity cost than Al.

   

a comparative advantage

   

more production efficiency

   

a marginal benefit

   

a comparative benefit

1 points

QUESTION 12

Economic growth depends upon which of the following?

i.Improving the quality of labor

ii.Technological advancement

iii.Increasing the amount of capital

   

iii only

   

ii only

   

i only

   

i, ii, and iii

1 points

QUESTION 13

In one hour John can produce 20 loaves of bread or 18 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?

   

John has a comparative advantage in producing cakes.

   

Phyllis has an absolute advantage in both goods.

   

Phyllis has a comparative advantage in producing cakes.

   

John has an absolute advantage in both goods.

1 points

QUESTION 14

As an economy produces more of one of the goods on a bowed out production possibilities frontier, what happens to the opportunity cost of producing the good?

   

It decreases.

   

It might increase, decrease, or remain constant depending on how much people value the additional units of the good.

   

It remains constant.

   

It increases.

1 points

QUESTION 15

The production possibilities frontier illustrates the

   

goods and services that people want.

   

maximum combinations of goods and services that can be produced.

   

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

   

limits to people's wants.

1 points

QUESTION 16

The United States produced approximately ________ worth of goods and services in 2007.

   

$14 billion

   

$14 trillion

   

$140 billion

   

$140 trillion

1 points

QUESTION 17

The fact of increasing opportunity cost when moving on the PPF means that

   

to increase the production of one product requires smaller and smaller sacrifices of the other good.

   

to decrease the production of one product requires smaller and smaller sacrifices of the other good.

   

to increase the production of one product requires larger and larger sacrifices of the other good.

   

when the government forces a movement from one point on the PPF to another point, no production is lost.

1 points

QUESTION 18

Other things equal, if India devotes more resources to educate its population than China,

   

China will grow faster than India.

   

India will be able to eliminate scarcity faster than China.

   

India will be able to eliminate opportunity cost faster than China.

   

India will grow faster than China.

1 points

QUESTION 19

In order for Ireland to grow more potatoes, wool production must decrease. This situation is an example of

   

zero opportunity cost.

   

producing at a point that lies beyond the PPF.

   

opportunity benefit.

   

a tradeoff.

1 points

QUESTION 20

Moving from one point to another on a production possibilities frontier implies

   

increasing the production of both goods.

   

increasing the production of one good and decreasing the production of another.

   

holding the production levels of both goods constant.

   

decreasing the production of both goods.

1 points

QUESTION 21

The United States is one of the richest nations in the world,

   

but it can still benefit from specialization and trade.

   

so does not need to trade with poor nations in order to achieve any gains from trade.

   

so might not have a comparative advantage in producing any goods.

   

so it must have a comparative advantage in the production of all goods.

1 points

QUESTION 22

"Comparative advantage" is defined as a situation in which one person can produce

   

more of all goods than another person.

   

a good for a lower opportunity cost than another person.

   

a good for a lower dollar cost than another person.

   

more of a good than another person.

1 points

QUESTION 23

The idea of increasing opportunity cost is reflected in the

   

linear shape of the production possibilities frontier.

   

bowed in shape of the production possibilities frontier.

   

bowed out shape of the production possibilities frontier.

   

positive slope of the production possibilities frontier.

1 points

QUESTION 24

Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country?

i)It enjoys gains from trade.

ii)It must have an absolute advantage in the production of the good it produces.

iii)It is producing at a point beyond its PPF.

   

i only.

   

i and ii.

   

i and iii.

   

ii and iii.

1 points

QUESTION 25

If a society moves from a period of time with significant unemployment to a time with full employment, its production possibilities frontier will

   

shift rightward.

   

not shift because the society moves from one point on the frontier to a point inside the frontier.

   

not shift because the society moves from a point inside the frontier to a point on the frontier.

   

shift leftward.

Apr 30 2020 View more View Less

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