Practice Questions
Click any question to see detailed solutions
In the context of production possibilities, what does a trade-off imply when increasing the production of one good over another?
When you want to make more of one thing, you have to take resources away from something else. Other options are incorrect because This answer suggests...
How does the concept of diminishing returns affect producer surplus in a competitive market?
Diminishing returns means that adding more resources leads to smaller increases in output. Other options are incorrect because Some might think that m...
In the context of production possibilities, how does an increase in marginal cost affect resource allocation decisions in an economy?
When marginal costs rise, it becomes more expensive to produce certain goods. Other options are incorrect because This answer suggests we should make ...
In a competitive market, if the price of a good increases, how should a firm adjust its resource allocation in order to optimize production while considering marginal cost and price elasticity?
When the price goes up, it usually means people are willing to pay more. Other options are incorrect because This answer assumes that higher prices al...
In the context of production possibilities, how does the concept of diminishing returns affect opportunity cost and marginal cost when increasing production of one good over another?
When you make more of one good, you give up more of another good. Other options are incorrect because Some might think that as you produce more, you s...
What does the production possibilities frontier (PPF) illustrate in economics?
The PPF shows the most goods we can make with our resources. Other options are incorrect because This answer confuses production with market behavior;...
What does the concept of opportunity cost refer to when considering production possibilities?
Opportunity cost means what you give up when you choose one option over another. Other options are incorrect because This option confuses opportunity ...
In the context of production possibilities, what does a trade-off imply when increasing the production of one good over another?
When you want to make more of one product, you have to take resources away from another. Other options are incorrect because This answer suggests you ...
If the price of corn rises significantly, what is the likely effect on the supply of soybeans?
When corn prices go up, farmers want to grow more corn. Other options are incorrect because This answer suggests farmers will stop growing soybeans co...
If the price of corn increases, farmers will likely allocate more resources to corn production and less to ______, leading to its price increasing due to decreased supply.
When farmers grow more corn, they have less time and land for other crops. Other options are incorrect because Some might think wheat is a similar cro...
If the price of corn significantly increases, which of the following outcomes regarding soybean supply and pricing is most likely to occur?
When corn prices go up, farmers may choose to grow more corn instead of soybeans. Other options are incorrect because Some might think that higher cor...
If the increase in the price of corn (A) leads to a decrease in the supply of soybeans (B), then an increase in the price of wheat (C) would likely result in what effect on the supply of corn (D)?
When wheat prices go up, farmers may choose to grow more corn instead of soybeans. Other options are incorrect because Some might think that higher wh...
If the price of corn rises, what is likely to happen to the supply of soybeans in the next planting season?
When corn prices go up, farmers want to make more money. Other options are incorrect because Some might think that soybean supply won't change; This o...
A farmer currently has the option to plant either corn or soybeans. If the market price of corn rises significantly due to increased demand, what is the most likely impact on the farmer's decision regarding soybean production, and how might this affect the market price of soybeans in the short term?
When corn prices go up, the farmer will want to plant more corn. Other options are incorrect because This answer thinks the farmer will grow more soyb...
Arrange the following events in the correct sequence regarding the effect of an increase in corn prices on soybean production: A. Farmers allocate more resources to soybeans. B. The price of corn increases. C. The supply of soybeans decreases. D. The price of soybeans increases.
When corn prices go up, farmers want to make more money. Other options are incorrect because This option suggests that the supply of soybeans decrease...
If the price of corn increases significantly, which of the following outcomes are likely to occur in the agricultural market? Select all that apply.
When corn prices go up, farmers might want to grow more corn. Other options are incorrect because Some might think farmers will just grow more corn; I...
If the price of corn significantly increases, what is the most likely effect on the supply of soybeans in the subsequent planting season?
When corn prices go up, farmers want to make more money. Other options are incorrect because Some might think that higher prices for corn mean farmers...
Master Production Possibilities and Price Effects
Ready to take your understanding to the next level? Access personalized practice sessions, progress tracking, and advanced learning tools.