Question

The figure given below represents an economy producing.com Figure 2.2 represents an economy producing com and planes under different economic situations. Planes Planes 14. Refer to Figure 2.2. Assume that the economy experiences a 20% drop in the work force. Which of the following graph(s) in the figure describe(s) the change in the economy's production possibilities curve (PPC)? a. Graph A b. Graph B c. Graph d. Graph B and C e. Graph A and C 15. Refer to Figure 2.2. If there is an increase in the effectiveness of pesticides, which of the following graph(s) will represent(s) the resulting shift in the production possibilities curve [PPC]? a. Graph A b. Graph B c. Graph C d. Graph A and B e. Graph B and C 16. If a nation specializes in activities in which opportunity costs are the lowest and then trades with other nations, it is most likely to: a. have a higher standard of living for its citizens than it would if it did not specialize and then trade. b. have a lower standard of living for its citizens than it would if it did not specialize and then trade. c. create as much wealth for its citizens as it could if it did not specialize and then trade. d. benefit in the short run but incur heavy loss in the long run. e. incur heavy loss in the short run and eventually cease production in the long run. 17. Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bill? a. 10 toys b. 8 toys c. 16 toys d. 12 toys e. 4 toys

Answer 1

a) "A"

Graph A represents a drop in the working population by 20%.

b) "B"

Graph B represents the situation when the pesticides are more effective.

c) "A"

They will be consuming above the PPF and that means a higher level of consumption in the market.

d) "B"

to repair one car he will have to give up 8 toys in the market.