What is the total opportunity cost of producing the second unit of capital goods?

The production possibilities curve below shows th Show more Please answer with simple explanations 1. The production possibilities curve below shows the hypothetical relationship between the production of capital goods and consumer goods in an economy. Production alternative Product A B C D E Capital Goods 0 1 2 3 4 Consumer Goods 22 18 13 7 0 What is the total opportunity cost of producing the second unit of capital goods? a. 4 units of consumer goods b. 5 units of consumer goods c. 9 units of consumer goods d. 13 units of consumer goods 2. The U.S. and the U.S.S.R a. Evolved in part from the same philosophical origins b. Shared Veblin as their intellectual inspiration c. Produced and distributed output according to the principal of relative depravation d. Did not share scarcity as their fundamental economic problem 3. From the economists perspective market failures basically arise when: a. The quantity demanded for a good or service is greater than the quantity supplied of the good or service b. The quantity supplied of a good or service is greater than the quantity demanded for a good or service c. Demand and supply do not accurately reflect all the benefits and all costs of production d. The market system is unable to adapt to or to accommodate change 4. Excludability refers to the fact that for private goods: a. Prices ration products only to those willing to pay for them b. Consumption by one person reduces the quantity available to others c. No one can be excluded from consumption of the product d. Spillover problems are excluded 5. Private goods differ from public goods in which of the following respects? a. Only private goods can benefit an increasing number of people at no additional cost b. Only private goods are characterized by nonexcludability c. Private goods are characterized by rivalry d. Private goods are more expensive than public goods 6. What will happen to the equilibrium quantity and prices of a product in a competitive market when the increase in demand exactly offsets the decrease in supply? a. Equilibrium quantity will increase and equilibrium price will decrease b. Equilibrium quantity will decrease and equilibrium price will increase c. Equilibrium quantity will increase and equilibrium price will stay the same d. Equilibrium quantity will stay the same and equilibrium price will increase 7. Which of the following statement concerning a pure public good is false? a. It is impossible to exclude nontaxpayers from the receipt of the public good b. All benefits associated with the production and use of a public good are received by the government c. The availability of a public good to one person simultaneously makes it available to all members of society d. The private sector does not have an economic incentive to produce a socially optimal amount of a public good 8. Which would be an example of an adverse selection problem? a. A person in ill health who purchases disability insurance b. A person who buys a product that contributes to pollution c. A person who purchases home insurance and then is less careful d. A person who lobbies for government intervention to settle a property rightd dispute 9. The functional distribution of income refers to the : a. Division of income between personal taxes consumption and saving b. Distribution of income according to basic resource classes i.e. wages rents interest and profits c. Division of income on basis of industry sources e.g. agriculture manufacturing mining etc d. Manner in which income is distributed among specific households 10. A government subsidy which has the effect of increasing the production of some product or service may be justified economically if: a. The spillover costs involved in its production are very substantial b. The private and spillover costs of production are very substantial c. Substantial spillover benefits are involved in its production d. The taxes resulting from the expanded sale of the product are sufficient to cover the subsidy 11. If the marginal tax rate is 20 percent by how much must income increase if your tax bill increase by $300? a. $300 b. $1000 c. $1500 d. Cannot be determined 12. If an action results in a negative externality then the market: a. Price is below the optimal price to society b. Price is above the optimal price to society c. Supply curve is too low d. Quantity is too low 13. Markets systems a. Make all who work hard rich b. Necessarily give us freedom c. Are inevitably efficient economically d. Generate inequalities 14. The price elasticity of demand for popular sporting event is 2. If the price of a ticket to this event increase by 10 percent the quantity of tickets demanded will: a. Decrease by 10 percent b. Increase by 20 percent c. Increase by 10 percent d. Decrease by 20 percent 15. Which of the following is an example of a positive economic statement? a. Nigeria should be given more foreign aid to foster economic development b. The minimum wage should be raised to help low-income workers c. The size of the Federal government should be reduced d. Education and income are highly correlated 16. Which would not be considered as capital (or an economic resource) by an economist? a. A share of corporate stock issued by General Motors b. An automobile used by General Electric c. A crane used by a building contractor d. A razor used by a barber 17. The basic economic challenge confronting street entertainers is a : a. Principal-agent problem b. Free-rider problem c. Monopoly problem d. Taxation problem 18. When society overallocates resources to the production of a product it means that the: a. Investment in the product is declining b. Opportunity cost of the product is decreasing c. Marginal benefit is greater than the marginal cost d. Marginal benefit is less than the marginal cost 41. In a linear equation for price and quantity supplied the value of the vertical intercept is 16 and the slope of the line is 5. If price is $296 the quantity supplied is: a. 144 b. 150 c. 56 d. 24 43. Price Quantity supplied Quantity demanded $10 100 295 $11 150 275 $12 190 250 $13 220 220 $14 245 180 $15 265 135 Refer to the above table. A technological advance lowers production costs such that the quantity supplied increase by 60 units of this product at each price. As a result of this technological change equilibrium output in this market: a. Decreased by 60 units b. Increased by 60 units c. Increased by 30 units d. Decrease by 30 units 44. A and B are substitute goods but A and C are complementary goods. If the costs of production of A decrease then the demand for: a. both B and C will decrease b. both B and C will increase c. B will increase and the demand for C will decrease d. B will decrease and the demand for C will increase 48. Seller A was willing to sell 400 units of a commodity at a prices of $5 per unit. Seller A is now willing to sell the same number of units at a prices of $4 per units. Evidently seller A has experiences a(n): a. increase in supply b. decrease in supply c. increase in demand d. decrease in demand Show less

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