MODULE 1 CHAPTER 2 QUIZ

The production possibilities frontier shows the ________ combinations of two products that can be produced in a particular time period with available resources.

Maximum Attainable

A student comments to his roommate that the only way he will be able to pass his final exams is to not sleep for the next three days. This statement suggests that

there is a trade-off between studying and sleep.

The Covid-19 recession of 2020 would most likely be represented in a production possibilities frontier graph by

a point inside the frontier.

Which of the following are separate flows in the circular flow model?

the flow of income earned from the sale of resources and the flow of expenditures on goods and services

You have an absolute advantage whenever you

can produce more of something than others with the same resources.

If a commercial dairy farm wants to raise funds to purchase feeding troughs, it does so in the

Factor Market

The ________ demonstrates the roles played by households and firms in the market system.

circular flow modeL

An outward shift of a nation's production possibilities frontier can occur due to

An increase in the labor force

In the circular flow model, producers

hire resources sold by households in the factor market.

The opportunity cost of taking an on-line history class is

equal to the highest value of an alternative use of the time and money spent on the class.

Increasing opportunity cost along a bowed-out production possibilities frontier occurs because

some factors of production are not equally suited to producing both goods or services.

The points outside the production possibilities frontier are

Unattainable

In a production possibilities frontier, a point inside the frontier is

productively inefficient.

All of the following are examples of spending on factors of production in the circular flow model except

Bima hires two students to work at his ice-cream store.

 

"Get Fit Together" purchases 3 new treadmills for its gym.

 

Iris buys a dozen roses for her mother's birthday.

 

The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

Iris buys a dozen roses for her mother's birthday.

Suppose your expenses for this term are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college?

$11,500