Question

16)As we move along a production possibilities curve and acquire larger and larger amounts of one good (e.g., guns), the sacrifices of the alternative good (e.g., butter) become larger and larger. This is an illustration of

-the law of supply.

-the law of demand.

-increasing opportunity costs.

-decreasing opportunity costs.

17)In the former Soviet Union distributing scarce consumer goods was accomplished by

-making the consumer stand in a long line for hours if not days.

-None of the choices are true.

-higher prices which eliminated some potential consumers.

-the government simply printing more money.

18)The U.S. distribution system is

-determined by a modified version of one dollar, one vote.

-identical to that of the former Soviet Union.

-similar to the fascist 1930's Germany.

-based on a pure socialist economy

19)Which statement is true?

-We have had recessions about every three years since World War II.

-The United States has a larger national output than any other country in the world.

-None of the statements are true.

-There were no recessions while Ronald Reagan was president.

20)Which of the following is a typical attribute of a socialist country?

-All of the choices are attributes of a socialist country.

-A large-scale redistribution of income program from the wealthy and well-to-do to the middle class, working, class and the poor.

-Taxes are very high, particularly on the wealthy classes.

-Cradle-to-grave security for its citizens. course microeconomic

Answer 1

A16. C. Increasing opportunity cost.

Production possibilities curve is also known as transformation curve. It shows all combinations of two goods that can be produced given the available resources.

Opportunity cost is the cost of what you are giving up to do what you are currently doing. The law of increasing opportunity costs states that as you increase production of one good, the opportunity cost to produce an additional good will increase.

The curved line of the production possibility curve states the law of increasing opportunity cost means that an increase in thw production of one good brings about increasing losses of the other good because resources are not suited for all tasks.

17. A. Making the consumer stand in a long line of hours, if not days.

18. A determined by a modified version of one dollar one vote

20. A. All of the choices are attributes of a socialist country which includes:

a. Cradle to grave security for citizens.

b. A large scale distribution of income program from wealthy and well to do the muddle class, working class and the poor.

c. Taxes are very high particularly on the wealthy classes.