# QUIZ 2 - QUIZ 2 VERSION 1 1 Suppose that 1 unit of labour...

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QUIZ 2 VERSION 1 1) Suppose that 1 unit of labour can produce either 5 units of wool or 2 pineapples. What is the opportunity cost of producing 1 pineapple? A) 2 units of wool B) zero C) 5/2 units of wool D) 5 units of wool 2) The production possibilities boundary depicts the fact that 3) If a production possibilities boundary is drawn as a straight line (as in Figure 1-1) it would indicate 4) Suppose a scientific breakthrough led to a lower-cost method of producing battery-operated cars in Canada. The likely effect would be to move Canada's current production 5) According to Figure 1, the levels of health and education expenditures at point C A) are not attainable from the given budget. B) could be achieved if the prices of health and/or education increased. C) are equal to those of point A and point B. D) are more cost-effective than those at points A, B, and D. FIGURE 1

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6) Consider Figure 1-2. If Country X is constrained by the production possibility boundary PPB 1 , and it is currently producing the combination of goods indicated at point C, then it could 7) Consider Figure 1-2. If Country X, constrained by the production possibility boundary PPB 1 , is currently producing the combination of goods indicated at point A, it can produce more capital goods by moving to point A) B. B) E. C) F. D) C. E) D. 8) The existence of absolute advantage
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