You have 12 lumps of wax, and limitless time, wicks, and other resources. It takes 2 lumps of wax to make a votive, and 6 lumps to make a pillar. If you were to graph the production possibilities frontier for votive and pillars, with the quantity of pillars, Qp, on the horizontal axis, and quantity of votives, Qv, on the vertical axis: ( Draw graph) 1. What would be the coordinates of the horizontal intercept of the production possibilities frontier? A. (0, 12) B. (12, 0) C. (0, 6) D. (6, 0) E. (0, 2) F. (2, 0) G. None of the above 2. What would be the coordinates of the vertical intercept of the production possibilities frontier? A. (0, 12) B. (12, 0) C. (0, 6) D. (6, 0) E. (0, 2) F. (2, 0) G. None of the above 3. What would be the opportunity cost of a pillar (measured in votives)? A. 1/3 B. 6 C. 3 D. 1/2 E. 1/6 F. None of the above 4. What would be the opportunity cost of a votive (measured in pillars)? A. 1/3 B. 6 C. 3 D. 1/2 E. 1/6 F. None of the above 5. For non-negative values of Qp and Qv, what would be the equation of the production possibilities frontier in slope-intercept form? A. Qp = 1/3 Qv B. Qv= 3Qp C. Qv = -3 Qp + 6 D. Qp = -1/3 Qv + 2 E. Qp = -1/3 Qv + 6 F. Qv = -1/3 Qp + 6 G. None of the above Reminder: You have 12 lumps of wax, and unlimited amounts of time, wicks, and other resources. It takes 2 lumps of wax to make a votive candle, and 6 lumps to make a pillar candle. If you were to graph the production possibilities frontier for votive and pillars, with the quantity of pillars, Qp, on the horizontal axis, and quantity of votives, Qv, on the vertical axis: 6. What does the point (1, 4) represent, if the quantity of pillars, Qp, is shown on the horizontal axis, and the quantity of votives, Qv, is shown on the vertical axis? A. Twelve lumps of wax B. Four pillars, and one votive C. Four votives, and one pillar D. Cannot be known from the information given. 7. Where would the point (1, 4) lie, in relation to the PPF? A. Inside it. B. On it. C. Outside it. D. Cannot be known from the information given. 8. Where would the point (1, 3) lie, in relation to the PPF? A. Inside it. B. On it. C. Outside it. D. Cannot be known from the information given. 9. Where would the point (1, 2) lie, in relation to the PPF? A. Inside it. B. On it. C. Outside it. D. Cannot be known from the information given. 10. If you were to improve your votive-making technique so as to need only one lump of wax to make a votive, but make no progress in the technology of pillar-making, how would your PPF change? A. It would shift away from the origin, but be parallel to the original PPF. B. It would shift toward the origin, but be parallel to the original PPF. C. Its slope would change, because the endpoint on the horizontal axis would move right. D. Its slope would change, because the endpoint on the vertical axis would move up. E. None of the above. 11. If you were to improve your votive-making technique so as to need only one lump of wax to make a votive, but make no progress in the technology of pillar-making, how would the opportunity cost of a pillar change? A. It would fall by one-half. B. It would double. C. It would remain the same. D. It would rise to 12. E. None of the above. 12. Assume it is still true that you have unlimited amounts of time, wicks, and other resources, and that it still takes 2 lumps of wax to make a votive candle, and 6 lumps to make a pillar candle. However, if you now have 24 lumps of wax, instead of 12, how has your PPF changed? A. It would shift away from the origin, but be parallel to the original PPF. B. It would shift toward the origin, but be parallel to the original PPF. C. Its slope would change, because only the endpoint on the horizontal axis would move right. D. Its slope would change, because only the endpoint on the vertical axis would move up. E. None of the above. 13. A production function tells one the maximum quantity of an output one can produce from a given quantity of inputs. A. False, because it tells one the minimum. B. True. C. False, because it tells one the maximum quantity of an output that can be produced given the quantity produced of the other output. D. True, because it assumes one always uses the maximum amount possible of each input. 14. Which of the following best defines economics? A. The science of money, income, and wealth B. The study of the overall performance of the economy C. The study of how societies use scarce resources to produce valuable commodities and distribute them among different people D. The value of the next-best option forgone 15. Choose the statement that best captures President Eisenhower's meaning, when he said, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. A. A command economy is essential in wartime. B. Property is theft. Capitalism is violence. C. The production possibilities frontier expands when the nation is under threat. D. The economy has a limited stock of resources, so military preparedness has a real opportunity cost in civilian material wellbeing. 16. Which best fits our textbook's definition of productive efficiency? A. Avoiding situations such as that in which a rich man's cat drinks the milk a poor child needs to remain healthy. B. Keeping opportunity costs at zero. C. Producing the maximum possible of each good, given the amounts produced of all other goods. D. A true laissez-faire economy. E. Using the most modern technology to keep the economy off the PPF. 17. Which is a likely reason for an economy to operate at a point inside (not on) the PPF? A. Significant unemployment of the workforce. B. Being located in a country with few natural resources. C. Use of the latest technology. D. Full employment of a modern capital stock. E. Disorganization. F. Customs that bar women from jobs they're well qualified to do. G. All except C and D. H. All except B, C and D I. All except C, D, and F. 18. In discussing the "Invisible Hand," Adam Smith implied that: A. Market failures can make the economy inefficient. B. Without idealism and generosity, we cannot expect economic growth. C. The essential role of government is coordination between producers and consumers. D. Laissez-faire can lead to economic prosperity. E. We can rely on markets to distribute incomes fairly. 19. What is a command economy? A. A French system for ordering commodities. B. An economy in which the government decides production and consumption. C. A patriarchal economy in which the use of force prevails. D. A laissez-faire economy. E. A totalitarian regime. F. An economy in which individuals and firms mainly decide production and consumption.