1. According to the production possibilities curve above, the opportunity cost of increasing the production of consumer goods from 0 to 300 units is 400 units of capital goods 150 units of capital goods 100 units of capital goods 50 units of capital goods 200 units of capital goods 2. Which production possibilities curve illustrated above represents an economy experiencing constant opportunity costs? A B C D E 3. If the government institutes an effective price ceiling on potato chips, then there will be a(n) decrease in demand for and an increase in supply of potato chips. increase in supply of potato chips. increase in quantity supplied of potato chips. increase in demand for potato chips. increase in quantity demanded for potato chips. 4. A decrease in savings in the United States would decrease investment causing economic growth to decrease. decrease capital investment causing economic growth to decrease. increase investment causing economic growth to decrease. increase capital investment causing economic growth to decrease. increase capital investment causing economic growth to increase. 5. If the United States is running a trade deficit, then the capital account is more negative than the current account is positive. more goods and services are being exported than are being imported. the nation's gross domestic product is increasing. more goods and services are being imported than are being exported. the nation is providing too much foreign aid to other nations. 6. The real value of the United States dollar is determined by the U.S. government. value of goods and services it will buy. U.S. investors in the foreign exchange market. foreign investors in the foreign exchange market. supply and demand in the open market. 7. If the U.S. government imposes a tariff on imported steel to protect American steel manufacturers, then consumers pay less for steel sold in the nation. consumers benefit from lower priced domestic steel. consumers pay more for steel sold in the nation. producers will export more domestic steel to foreign nations. producers will supply more domestic steel at lower prices. 8. Which of the following are true concerning tariffs and quotas? i. ii. iii. Consumers benefit from tariffs and quotas. Some domestic producers benefit from tariffs and quotas. Government revenues may increase as a result of enacting tariffs. II only. I and II only. I and III only. II and III only. I, II, and