Microsoft+Word+-+1021-+Quiz+_1+All+versions%2C+Questions+_+Answer+Key

Microsoft+Word+-+1021-+Quiz+_1+All+versions%2C+Questions+_+Answer+Key

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University of Western Ontario Economics 1021A‐004 (Kahnert) Tutorial Quiz #1 Version 111 1) Identify whether the following statements are true or false: I. All points on the production possibilities frontier (PPF) are allocatively efficient. II. Opportunity cost increases as the number of alternative options increases. A. I is true; II is false B. I is false; II is true C. Both I and II are true D. Both I and II are false Answer: D 2) Suppose that Tom and John both produce tables and chairs, with a linear PPF. In one day, Tom can produce 5 chairs or 10 tables while John can produce 10 chairs or 60 tables. Which of the following is most likely to be true? A. Tom will want to trade with John if the market price of each table is 0.4 chairs. B. John will want to trade with Tom if the market price of each chair is 1.5 tables. C. Tom and John will both want to trade as long as the price of each table is between 2 and 6 chairs. D. John will not be willing to trade at any price because he is already so much more productive than Tom at producing both chairs and tables. Answer: A
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