MacroEconomics Practice Problems, Chapter 2

MacroEconomics Practice Problems, Chapter 2 -...

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Practice Problems: Chapter 2 Question 1  (1 point)   When economists want to describe how much an economy can produce with a given amount of  resources, they use a model known as: Question 1 options: the positive model. the normative model. comparative advantage. the production possibilities frontier. Question 2  (1 point)   Economists typically depict the production possibilities frontier as a bowed out curve rather than as a  straight line in order to show that: Question 2 options: the opportunity cost of producing a good rises as more is produced. the opportunity cost of producing a good declines as more is produced. resources used in the production of one good cannot be used in the production of  another. opportunity cost is always present. Question 3  (1 point)   Those points lying beyond the production possibility frontier: Question 3 options: are inefficient. represent outcomes in which resources would be unemployed. represent outcomes unattainable with the current level of technology and resources. represent outcomes that are attainable with the current level of technology and  resources, but are less desirable than those on the frontier.
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Question 4  (1 point)   What is measured along the horizontal axis in a graph of the production possibility frontier? Question 4 options: the amount of labor input the amount of capital input the quantity of one good produced the quantity of one good exported Question 5  (1 point)   Assume that we have a PPF. Point A lies inside (to the left) of the frontier. Point B and C are located  along the frontier and Point D is located outside (to the right) the frontier. Which of the following  points represent feasible (attainable) production points? Question 5 options: All points (A, B, C and D) are feasible. Points A, B and C are feasible. Points B and C are feasible.
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