Macroeconomics - Intro Class

The value of the best alternative forgone when a decision is made defines

• economic good

• opportunity cost

• scarcity
  

• trade-off

In which way does a straight line production possibilities curve differ from a concave production possibilities curve?

• A straight line production possibilities curve has a decreasing opportunity cost.

• A straight line production possibilities curve has a constant opportunity cost.

• A straight line production possibilities curve has an increasing opportunity cost.

• A straight line production possibilities curve does not show opportunity cost.

• There is no difference between the two production possibilities curves.

The law of increasing opportunity cost is reflected in the shape of the

• production possibilities curve concave to the origin.

• production possibilities curve convex to the origin.

• horizontal production possibilities curve.

• straight-line production possibilities curve.

• upward-sloping production possibilities curve.

Use the figure below for Questions 4 to 7. It shows the production possibilities curve for a country with full employment of a given-size labor force.

If the country is currently producing at Point C, it can produce more computers by doing which of the following?

• 1. Moving to Point A

• 1. Moving to Point B

• 1. Moving to Point D

• 1. Moving to Point E

• 1. Remaining at Point C, since computer production is maximized

Which of the following statements about the

production possibilities curve is true?

• 1.  Point A is not attainable in a developed society.

• 1. Point D is not attainable given the society’s resources.

• 1. The relative position of Points C and D reflect production alternatives rather than relative prices.

• 1. Elimination of unemployment will move the production possibilities curve to the right, closer to Point E.

• 1. Point E lies outside the production possi- bilities curve because it represents a combi- nation of resources not desired by the citi- zens of the country.

How might Point E be attained?

• If the country’s resources were more fully employed

• If the country’s resources were shifted to encourage more efficient use of scarce resources

• If improvements in technology occurred in either the computer sector or the farm products sector

• If firms decreased their output of computers

• If the nation used more of its scarce resources to produce farm products

Which of the following points would most likely lead to a rightward shift of the production possibilities curve over time?

• Point A

• Point B

• Point C

• Point D

• Point E

Two nations, Mars and Venus, each produce food and clothing. The table above gives points on each nation’s production possibilities curve. The asterisks indicate their current point of production.

In Mars, the opportunity cost of obtaining the first two units of food is how many units of clothing?

What do you understand by Econometrics?

Explain any 3 Economics termed being used in this scene from the movie 'Big Short'.