9 If society begins by producing 3 units of X and 4 units of

9. If society begins by producing 3 units of X and 4 units of Y and then alters production so that it is now producing 4 units of X and 4 units of Y, and we know that the quantity and quality of resources were unchanged and that technology did not change, then: a. 3 units of X and 4 units of Y are a combination best represented by a point outside the PPC. b. the movement described is not possible c. society has moved along the PPC. d. e. resources were being fully utilized at 3 units of X and 4 units of Y 3 units of X and 4 units of Y are a combination best represented by a point inside the production possibilities curve 10. Consider the production possibilities curve for a country producing cheese and wine. Assume all resources are devoted to cheese production, but the country has decided to produce some wine. The first few resources transferred from cheese to wine production are a. those that are least specialized in cheese production b. those that are most specialized in wine production. c. those that are most specialized in cheese production. d. those that are neither specialized in cheese nor wine production. e. those that are highly specialized in both cheese and wine production.

Solution

9. c

10. b

7. b

8. d (Explanation: 5 x 10)

4. e

5. e   [Explanation: (-8/0.20) * (0.80/16) = - 2]