Frequent Exam Questions without Answers
The PPF
Chapter 2 ― Question 3
Explain
- why the PPF illustrates the notion of opportunity costs
- why an outward-bowed PPF illustrates diminishing returns
- why a linear PPF illustrates constant opportunity costs
- how the PPF illustrates growth.
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Chapter 2 ― Question 4
Which of the following developments is most likely to cause an inward shift of the PPF:
- a natural disaster
- a decline in capital
- competition from abroad
- an improved technology
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Chapter 2 ― Question 5
If it is possible to increase the output of both butter and guns, which of the following statements about the economy is true
- the economy is inefficient and inside the PPF
- the economy is efficient and outside the PPF
- the economy is efficient and on the PPF
- the economy is inefficient and on the PPF
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Chapter 2 ― Question 6
A PPF can illustrate the trade-off between leisure and grades. If you put leisure on the x-axis and grades on the y-axis, in how far does the PPF resemble the butter-gun PPF? Where is it different?
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Chapter 11 ― Question 10
What magnitudes are indicated on the x-axis and the y-axis of the following curves:
- the PPF
- the production function
- the isoquant curve
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