Question

17. Match the statement affecting the production possibility curve with its graphical representation: New technology affecting both industries

A. inward shift of the curve

B. a movement along the curve

C. outward shift of the curve

D. A rotation of the curve

E. Point outside the curve

F. point inside the curve

18. Match the statement affecting the production possibility curve with its graphical representation: An increase in consumer spending on one good but no change in consumer's income

A. inward shift of the curve

B. a movement along the curve

C. outward shift of the curve

D. A rotation of the curve

E. Point outside the curve

F. point inside the curve

19. Match the statement affecting the production possibility curve with its graphical representation: New technology affecting only one industry

A. inward shift of the curve

B. a movement along the curve

C. outward shift of the curve

D. A rotation of the curve

E. Point outside the curve

F. point inside the curve

20. Match the statement affecting the production possibility curve with its graphical representation: An increase in teen-agers with part-time jobs

A. inward shift of the curve

B. a movement along the curve

C. outward shift of the curve

D. A rotation of the curve

E. Point outside the curve

F. point inside the curve

21. Match the statement affecting the production possibility curve with its graphical representation: A decrease in consumption of one product to get more of the other product

A. inward shift of the curve

B. a movement along the curve

C. outward shift of the curve

D. A rotation of the curve

E. Point outside the curve

F. point inside the curve

22. An economy's production possibility boundary is given by the mathematical expression 110 = 2 A + B, where A is the quantity of good "a" and B is the quantity of good "b". [Hint: To help you answer this question, use the formula Y = mX + b and have good "a" quantities correspond to X-axis values and good "b" quantities correspond to Y-axis values.]

Part 1: If all the resources in the economy are allocated to producing good "a", what is the maximum level of production for this good

Part 2: What is the maximum level of production for good "b"

Part 3: What is the opportunity cost per unit of increasing the production of good “b”

Part 4: Can the combination of 8 units of good A and 6 units of good B be produced in this economy (yes=1, no=2)

Part 5: Can the combination of 30 units of good A and 16 units of good B be produced in this economy (yes=1, no=2)

23. Select the statement in the pulldown menu which best describes the following term: DEMAND DECREASE:

A. demand for one good and the price of the other are directly related

B. movement upward to the left along a demand curve

C. movement down to the right along a demand curve

D. shift of the demand curve to the right

E. shift of the demand curve to the left

24. Select the statement in the pulldown menu which best describes the following term: Decrease in quantity demanded:

A. demand for one good and the price of the other are directly related

B. movement upward to the left along a demand curve

C. movement down to the right along a demand curve

D. shift of the demand curve to the right

E. shift of the demand curve to the left

Answer 1

1 - Option C

Outward shift of the curve

The new technology will shift the PPC outward denoting greater capacity

2 - Option D

Rotation of the curve

Since only one good is changing , it will lead to roation. Shift will occur when consumption of both goods change.

3 - Option D

Roation of the curve

It will cause the curve from one end to come outward. The other end will remain constant

4 - Option F

Point inside the curve

This is because the economy is not performing at its full potential.

5 - Option B

Movement along the curve.

Opportunity cost will be incured in this process.