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The following data give the production possibilities frontier of an economy that produces two

types of goods, guns and bread. Read the following table and answer questions 133-135 Table 1:

Production Possibilities

Production possibilities A B C D E F G H

Guns 0 10 20 30 40 50 60 30

Bread 105 100 90 75 55 30 0 45

1.  According to Table 1, the opportunity cost of increasing gun’s production from 20 to 30 units is

equal to

a.  10 units bread

b.  15 units bread

c.  25 units bread

d.  24 units bread

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The following data give the production possibilities frontier of an economy that produces two

types of goods, guns and bread. Read the following table and answer questions 133-135 Table 1:

Production Possibilities

Production possibilities A B C D E F G H

Guns 0 10 20 30 40 50 60 30

Bread 105 100 90 75 55 30 0 45

2.  Given the data in Table 1, one moves successively from point A to points B, C, D,E and F, the

opportunity cost of guns:

a.  Increases as more of guns are produced

b.  Decreases as more of guns are produced

c.  Remains constant as more of guns are produced

d.  Nothing can be said

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The following data give the production possibilities frontier of an economy that produces two

types of goods, guns and bread. Read the following table and answer questions 133-135 Table 1:

Production Possibilities

Production possibilities A B C D E F G H

Guns 0 10 20 30 40 50 60 30

Bread 105 100 90 75 55 30 0 45

3.  Point D is efficient while point H (30 guns and 45 loaves of bread) is inefficient. Why?

a.  Point D is outside the PPF while point H is on the PPF

b.  Point D is inside the PPF while point H is on the PPF

c.  Point D is on the PPF while point H is inside the PPF

d.  Nothing can be said

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Use Table 2 to answer questions 138-141. “Bozzo’s burgers” is a small restaurant and a price taker.

The table below provides the data of Bozzo’s output and costs in Rupees.

Quantity Total cost Fixed cost Variable

cost

Average

variable cost

Average

total cost

Marginal

cost

0 100 - - -

10 210

20 30030 400

40 540

50 790

60 1060

1.  If burgers sell for Rs. 14 each, what is Bozzo’s profit maximizing level of output? 

a.  10 burgers

b.  40 burgers

c.  50 burgersd.  60 burgers

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Use Table 2 to answer questions 138-141. “Bozzo’s burgers” is a small restaurant and a price taker.

The table below provides the data of Bozzo’s output and costs in Rupees. 

Quantity Total cost Fixed cost Variable

cost

Average

variable cost

Average

total cost

Marginal

cost

0 100 - - -

10 210

20 30030 400

40 540

50 790

60 1060

2.  What is the total variable cost when 60 burgers are produced?

a.  Rs. 690

b.  Rs. 960

c.  Rs. 110d.  Rs. 440

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Use Table 2 to answer questions 138-141. “Bozzo’s burgers” is a small restaurant and a price taker.

The table below provides the data of Bozzo’s output and costs in Rupees. 

Quantity Total cost Fixed cost Variable

cost

Average

variable cost

Average

total cost

Marginal

cost

0 100 - - -

10 210

20 30030 400

40 540

50 790

60 1060

3.  What is average fixed cost when 20 burgers are produced?

a.  Rs. 5

b.  Rs.3.33

c.  Rs. 10d.  Rs. 2.5

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Use Table 2 to answer questions 138-141. “Bozzo’s burgers” is a small restaurant and a price taker.

The table below provides the data of Bozzo’s output and costs in Rupees. 

Quantity Total cost Fixed cost Variable

cost

Average

variable cost

Average

total cost

Marginal

cost

0 100 - - -

10 210

20 30030 400

40 540

50 790

60 1060

4.  Between 10 to 20 burgers, what is the marginal cost (per burger)?

a.  Rs. 11

b.  Rs. 13

c.  Rs. 14d.  Rs. 9

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Use Table 3 to answer questions 149-150.

Table 3

Hours of Labour Total Output Marginal Product

0 ----- -----

1 200 200

2 ---- 160

3 480 ----

1.  What is the total output when 2 hours of labour are employed?

a.  160

b.  200

c.  360

d.  400

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Use Table 3 to answer questions 149-150.

Table 3

Hours of Labour Total Output Marginal Product

0 ----- -----

1 200 200

2 ---- 160

3 480 ----

2.  What is the marginal product of the third hour of labour?

a.  120

b.  160

c.  200

d.  480