Liberty University ECON 213 Quiz 2 Complete Solutions Correct Answers Key

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Liberty University ECON 213Quiz 2 Complete Solutions Correct Answers KeyTwo different versionsQuestion 1 When one producer has a comparative advantage in production, she:Question 2 The process of using current resources to create or buy new capital is called:Question 3 A positive statement:Question 4 An increase in general resources that affects the production of both goods on aproduction possibilities frontier (PPF) would cause an:Question 5 Refer to the following table to answer the questions that follow. Given the samequantity of resources, what is JayZ’s opportunity cost of producing a New York pizza?Question 6 Refer to the following figure for the questions that follow. According to the figure, anew technology that makes it easier to peel, core, and prepare apples will cause:Question 7 To determine which of two producers has a comparative advantage, you would needto know their:Question 8 Consider the following scenario. Two friends, Rachel and Joey, enjoy baking bread andmaking apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make onepie. Joey takes four hours to bake one loaf of bread and four hours to make one pie. If Racheland Joey decide to specialize in order to maximize their combined output, who should producewhat?Question 9 Refer to the accompanying figure to answer the questions that follow. Unemployedresources are evident at:Question 10 Refer to the following table to answer the questions that follow. Suppose that AliciaKeys and JayZ could each make either New York–style pizza or Philly cheesesteaks. Given aneighthour workday, which of the following would permit them to consume outside their respectiveproduction possibilities frontiers (PPFs)?Question 11 When the opportunity cost of producing a good rises as you produce more of it, youexperience:Question 12 The figures below depict the production possibilities frontiers (PPFs) for two peoplewho can allocate the same amount of time between making pizzas and making stromboli. Refer

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to these figures to answer the questions that follow. What is Jim’s opportunity cost of making 1stromboli?Question 13 Ceteris paribus means:Question 14 The ability of one producer to create more of a good than another producer usingthe same quantity of resources is called:Question 15 Which of the following is a positive statement?Question 16 Refer to the following table to answer the questions that follow. Given an eighthourworkday, and to experience gains from trade,Question 17 Consider the production possibilities frontier (PPF) shown in the figure below toanswer the questions that follow. Given current resources and technology, the attainable range isbest described as:Question 18 Which of the following is a normative statement?Question 19 Consider the following scenario to answer the questions that follow: Two friends,Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake 1loaf of bread and one hour to make 1 pie. Joey takes four hours to bake 1 loaf of bread and fourhours to make 1 pie. What is Joey’s opportunity cost of baking 1 pie?Question 20 Suppose you are studying a production possibilities frontier (PPF) that has a bowed-out shape relative to the origin. What causes this shape?Question 1 The area inside (within) the production possibilities frontier (PPF) contains:Question 2 Michael and Angelo are both artists who can create sculptures or paint paintings eachday. The following table describes their maximum outputs per day. Does either person have anabsolute advantage?Question 3 The figures below depict the production possibilities frontiers (PPFs) for two peoplewho can allocate the same amount of time between building wooden boats and solving crimes.Refer to these figures to answer the questions that follow. What is Gibbs’s opportunity cost ofmaking a wooden boat?

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Question 4 The ability of one producer to create more of a good than another producer using thesame quantity of resources is called:Question 5 The figures below depict the production possibilities frontiers (PPFs) for two peoplewho can allocate the same amount of time between building wooden boats and solving crimes.Refertothesefigurestoanswerthequestionsthatfollow.Whichstatementbestdescribesabsolute advantage?Question 6 You have a comparative advantage in producing a good whenever:Question 7 Mrs. Abel has a comparative advantage in producing cabbage if, in comparison to Mrs.Bee, Mrs. Abel can grow cabbage:Question 8 The important act of holding all other variables constant while examining a particularvariable is known as:Question 9 An increase in general resources that affects the production of both goods on aproduction possibilities frontier (PPF) would cause an:Question 10 Use these production possibilities frontier (PPF) curves, which compare the ancientproduction of agricultural products to art and literature, to answer the questions that follow.Supposetheplowisinventedandagriculturalproductivitygreatlyincreases.Whichofthefollowing graphs best depicts how this would affect the PPF?Question11Supposeyoufindaproductionpossibilitiesfrontier(PPF)thatisshapedlikeastraight line. What can you determine about the production of the two goods?Question 12 A town on the Gulf Coast is battered by a massive hurricane that destroys most of itsproductive resources. The community’s production possibilities frontier (PPF) would show an:Question 13 Think of the production possibilities frontier (PPF) model. When society is producingthe largest possible output from its resources, it is operating:Question 14 Which of the following is a positive statement?Question 15 When the opportunity cost of producing a good rises as you produce more of it, youexperience:Question 16 Which of the following is a normative statement?Question 17 Refer to the following figure to answer the questions that follow. In the figure, point

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