homework 1
1. Payments to the factors of production are
Select one:
a. land, labor, capital, and entrepreneurship.
b. rent, mortgage, interest, and bonds.
c. rent, wages, interest, and profit or loss
d. rent, interest, bonds, and profit or loss
e. rent, wages, profit or loss, and bonus
2. Why is a production possibilities frontier bowed out (concave)?
Select one:
a. A) The bowed shape reflects constant opportunity cost.
b. B) The bowed shape reflects decreasing opportunity cost
c. D) The bowed shape indicates that opportunity cost at first increases at a decreasing rate, and then begins to increase at an increasing rate.
d. C) The bowed shape indicates that opportunity cost at first decreases at a decreasing rate, and then begins to decrease at an increasing rate.
e.
E) The bowed shape reflects increasing opportunity cost.
3. The figure above illustrates a small country's production possibilities frontier. Based on the figure, we can tell that the nation's resources are Select one:
a. not equally productive in all tasks because the production possibilities frontier is bowed out.
b. equally productive in all tasks because the slope is negative.
c. equally productive in all tasks because the production possibilities frontier is bowed out.
d. unlimited because the slope is negative and the PPF is bowed out.
e. not equally productive in all tasks because the slope is negative.
4. Liz has a comparative advantage in ________ because ________.
Select one:
a. both goods; she can produce more of both goods per hour than Joe can
b. salads; her opportunity cost of producing salads is lower than Joe's
c. smoothies; her opportunity cost of producing smoothies is lower than Joe's
d. salads; she can produce more salads per hour than Joe can
e. smoothies; she can produce more smoothies per hour than Joe can
5. The production possibilities frontier illustrates the Select one:
a. A) maximum combinations of goods and services that can be
Select one:
a. land, labor, capital, and entrepreneurship.
b. rent, mortgage, interest, and bonds.
c. rent, wages, interest, and profit or loss
d. rent, interest, bonds, and profit or loss
e. rent, wages, profit or loss, and bonus
2. Why is a production possibilities frontier bowed out (concave)?
Select one:
a. A) The bowed shape reflects constant opportunity cost.
b. B) The bowed shape reflects decreasing opportunity cost
c. D) The bowed shape indicates that opportunity cost at first increases at a decreasing rate, and then begins to increase at an increasing rate.
d. C) The bowed shape indicates that opportunity cost at first decreases at a decreasing rate, and then begins to decrease at an increasing rate.
e.
E) The bowed shape reflects increasing opportunity cost.
3. The figure above illustrates a small country's production possibilities frontier. Based on the figure, we can tell that the nation's resources are Select one:
a. not equally productive in all tasks because the production possibilities frontier is bowed out.
b. equally productive in all tasks because the slope is negative.
c. equally productive in all tasks because the production possibilities frontier is bowed out.
d. unlimited because the slope is negative and the PPF is bowed out.
e. not equally productive in all tasks because the slope is negative.
4. Liz has a comparative advantage in ________ because ________.
Select one:
a. both goods; she can produce more of both goods per hour than Joe can
b. salads; her opportunity cost of producing salads is lower than Joe's
c. smoothies; her opportunity cost of producing smoothies is lower than Joe's
d. salads; she can produce more salads per hour than Joe can
e. smoothies; she can produce more smoothies per hour than Joe can
5. The production possibilities frontier illustrates the Select one:
a. A) maximum combinations of goods and services that can be