Chapter 2 Trade-offs, Comparative Advantage, and the Market System

Figure 2-1

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9) Refer to Figure 2-1. ________ is (are) inefficient in that not all resources are being used.

A) Point A

B) Point B

C) Point C

D) Points A and C

10) Refer to Figure 2-1. ________ is (are) technically efficient.

A) Point A

B) Point B

C) Point C

D) Points B and C

11) Refer to Figure 2-1. ________ is (are) unattainable with current resources.

A) Point A

B) Point B

C) Point C

D) Points A and C

12) In a production possibilities frontier model, a point inside the frontier is

A) allocatively efficient.

B) productively efficient

C) allocatively inefficient.

D) productively inefficient.

13) Carmelita can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is the opportunity cost of performing an additional 15 manicures?

A) 5 pedicures

B) 20 pedicures

C) 25 pedicures

D) 45 pedicures

14) If the production possibilities frontier is linear, then

A) opportunity costs are decreasing as more of one good is produced.

B) it is easy to efficiently produce output.

C) opportunity costs are increasing as more of one good is produced.

D) opportunity costs are constant as more of one good is produced.