Review+Questions+1

Review+Questions+1 - Name: _ Date: _ Good Y Y2 Y1 Y0 C B A...

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Name: __________________________ Date: _____________ Good X Good Y C A X0 X1 X2 B Y2 Y1 Y0 1. Refer to the graph above. As you move from point A to point C: A) efficiency is increased because we have more of good X. B) efficiency is decreased because we have more of good Y. C) there is no change in efficiency. D) the change in efficiency is unclear. 2. Refer to the graph above. We can infer from the graph that this society: A) prefers B to C. B) prefers C to B. C) is indifferent between C and B. D) is not using its resources efficiently. 3. An improvement in technology will: A) imply that the law of increasing costs no longer applies. B) shift the production possibilities curve inward. C) shift the production possibilities curve outward. D) have no effect on the production possibilities curve. Page 1
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C A A B Guns Butter Guns C D B (a) (b) 4. Refer to the graph above. The discovery of a new supply of resources used only in the production of butter can be shown by which movement? A) From A-B to C-D in diagram A. B) From C-D to A-B in diagram A. C) From A-B to A-C in diagram B. D) From A-C to A-B in diagram B. 5. Refer to the graph above. Discovery of a new technology that can be applied to both butter and gun production would result in a movement from: A) A-B to C-D in diagram A. B) C-D to A-B in diagram A. C) A-B to A-C in diagram B. D) A-C to A-B in diagram B. Tuna Shrimp D B C A Tuna Page 2
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6. Refer to the graph above. Which of the shifts explains what would happen to the production possibility curve if restrictions on tuna fishing were eliminated? A) A B) B C) C D) D C D A B Cars Garments Cars 7. Refer to the graph above. Which of the shifts explains what would happen to the Philippine production possibility curve if a cyclone destroys five major car factories in the Philippines? A) A B) B C) C D) D C D A B Industrial goods Service goods Industrial goods Page 3
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8. Refer to the graph above. Suppose a country is plagued by political unrest that disrupts all sectors of its economy. If the political unrest ends, which of the following shifts explains what would most likely happen to the country's production possibility curve? A) A B) B C) C D) D 9. The three central coordination problems of the economy given in the book are A) what to produce, how to produce, and for whom to produce. B) whether to produce, what to produce, and why. C) for whom to produce, what to produce, and why. D) how to produce, when to produce, and what to produce. 10. If we lived in a society where people were not selfish, then A) the three central economic problems would no longer exist. B) the three central economic problems would still exist. C) there would be a political problem but not an economic problem.
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Review+Questions+1 - Name: _ Date: _ Good Y Y2 Y1 Y0 C B A...

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