Answer key to sample problems for test 1

1-A, 2-A, 3-B, 4-A, 5-C, 6-A,
7-B, 8-D, 9-C, 10-C, 11-A, 12-C, 13-B
14-B, 15-D, 16-B, 17-B, 18-A, 19-A,
20-D, 21-C, 22-B, 23-B, 24-C, 25-B, 26-C,
27-B, 28-A, 29-C, 30-A, 31-A,
32-A, 33-D, 34-C, 35-D, 36-A, 37-B,
38-D, 39-C, 40-B, 41-A,
42-C, 43-B, 44-B, 45-C.

You can plot the PPF by treating the combinations of Truck and Corn as "ordered pairs" on the diagram.

A. 10 bushels, 15 bushels, 20 bushels, 25 bushels

B. Opportunity cost is increasing.

C. The combination is feasible but inside the limits of the PPF. The economy is not using its resources efficiently or there is some unemployment and other idle resources.

D. The combination is not feasible. It lies outside the PPF. The way to get to that production point is more resources or better technology. (Be careful, you can trade to get a consumption bundle outside of the PPF, however, the question clearly asks if it is a possible production point. Trade does not enter into this answer.)

Let me know if you think any of these answers is incorrect. There could be a typo or I could have just done the problem wrong.

Good luck.