Chapter 2

Figure 2-3 (Tractors and Tubes)

1. Which point represents the situation in which the economy is producing its
maximum possible quantity of tubas? E
2. Inefficient production is represented by which point or points? D
3. At which points or points can the economy not currently produce? A,C
4. Efficient production is represented by which point or points? B,E
5. The economy has the ability to produce at which point or points? B
Figure 2-8 (Barrels and Bathtubs)
6. What is the opportunity cost of moving from point A to point B? 20 barrels
7. If this economy puts all of its resources into the production of bathtubs it
could produce? No barrels and 16 bathtubs
8. Which of the following combinations can this economy not produce? 25 barrels
and 12 bath
9. If this economy moved from point C to point E? It still would not be
producing efficiently
10. Production is efficient if the economy is producing? 30 barrels and 6
bathtubs
Figure 2-5 (Batteries and Bagels)
11. The shift of the production possibilities frontier from A to B illustrates:
Economic Growth
12. Which of the following events would explain the shift of the production
possibilities frontier from A to B? The economy experienced a technological
advance in the production of batteries
Figure 2-4 (Toasters and Toothbrushes)
13. The opportunity cost of obtaining 15 additional toasters by moving from
point D to point C is none of the above
14. Suppose the economy is producing at point B. Which of the following
statements would best explain this situation? There is widespread unemployment in
the economy
15. If the economy moves from point A to point D, the opportunity cost is? 20
toasters
16. The opportunity cost of obtaining 10 additional toasters by moving from
point B to point A is? 0, since economy has resources to produce 10 additional
toasters
Table 2-1
17. Which of the following statements accurately describes the production
possibilities for Toyland? The opportunity cost of an additional 100 dolls
increase as more dolls are produced
18. What is the opp. Cost to Toyland of increasing the productions of dolls from
200 to 300? 100 fire trucks
19. If the production possibilities frontier is bowed outward, then in place of
the ? we might have? 310
Figure 2.7 (Capital Goods and Consumer Goods)
20. Which of the following would most likely have caused the production
possibilities frontier to shift outward from A to B? a general technological
advance
21. The shift of the production possibilities frontier from A to B can best be
described as? Economic Growth