Question 1

Suppose a factory can produce either 1000 windows or 250 doors in a day. What is the opportunity cost of producing one extra door?

Accepted Answer

$$4$$ windows per door

Question 2

If an economy is operating at a point inside its production possibilities curve (PPC), what does this indicate about resource use?

Accepted Answer

Some resources are not fully employed or are used inefficiently.

Question 3

If a new technology doubles the ability to produce food but does not affect clothing production, how will the PPC shift?

Accepted Answer

The PPC will shift outward only along the horizontal axis.

Question 4

A medical study finds that eating chicken reduces heart problems. What is the likely effect on the demand for chicken?

Accepted Answer

Demand for chicken shifts to the right.

Question 5

If the price of beef falls and consumers buy more beef and less fish, what happens in the fish market?

Accepted Answer

The demand for fish shifts to the left.

Question 6

Suppose a severe drought in Russia causes a major failure in the wheat crop. What is the likely effect on the world wheat market?

Accepted Answer

World supply shifts left, price rises.

Question 7

If the government closes the Atlantic cod fishery, causing the price of fish to rise, what is this an example of?

Accepted Answer

A change in the quantity demanded for fish.

Question 8

If the opportunity cost of producing one more unit of food at point b on a PPC is $$2.5$$ units of cloth, what is the opportunity cost of producing one more unit of cloth at the same point?

Accepted Answer

$$1$$ unit of food

Question 9

Which of the following best explains why Canadian wheat farmers benefit from a Russian drought that reduces world wheat supply?

Accepted Answer

World wheat prices rise, increasing Canadian farmers' revenue.

Question 10

If an earthquake destroys many clothing factories, what happens to the PPC for an economy producing food and clothing?

Accepted Answer

The PPC shifts inward only along the vertical axis.

Question 11

If people buy less fish because of a rise in fish prices, this is:

Accepted Answer

A change in the quantity demanded for fish.

Question 12

Suppose the PPC for an economy shifts inward. Which of the following could explain this change?

Accepted Answer

A civil war destroying infrastructure.

Question 13

If the Catholic Church relaxes its ban on eating meat on Fridays, what is the likely effect on the demand for fish?

Accepted Answer

Demand for fish shifts to the left.

Question 14

Which of the following is an example of a movement along the demand curve?

Accepted Answer

A change in the price of the good itself.

Question 15

If a factory can produce 942 windows or 697 doors, what is the opportunity cost of producing one extra door?

Accepted Answer

$$1.35$$ windows per door

Question 16

If the price of beef rises due to a disease, what is the likely effect on the demand for chicken?

Accepted Answer

Demand for chicken shifts to the right.

Question 17

If a point lies outside the PPC, what does this indicate?

Accepted Answer

The combination is unattainable with current resources.

Question 18

If average household income increases and chicken is a normal good, what happens to the demand for chicken?

Accepted Answer

Demand for chicken shifts to the right.

Question 19

If fears of mercury poisoning lead locals to shun fish caught in nearby lakes, what happens in the fish market?

Accepted Answer

Demand for fish shifts to the left.

Question 20

If the opportunity cost of producing one extra door is less than one window, which scenario below matches this description?

Accepted Answer

450 windows and 600 doors

Production Possibilities, Opportunity Cost, and Market Dynamics: Microeconomics Study Guidance

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