Macro Homework 2
Point A is ___ and point B is ___
Attainable, unattainable
The production possibilities frontier is the boundary between the combination of goods and services that ______, given the available factors of production and the state of technology
Can be produced and the combinations that cannot be produced
You and your neighbor pick apples and cherries. If you can pick apples at a lower opportunity cost than your neighbor can, which of the following is true?
You have a comparative advantage in picking apples.
Ms. Boulware is the best lawyer and the best secretary in town. She has:
an absolute advantage in both jobs
In his 1776 book, "An Inquiry into the Nature and Causes of the Wealth of Nations," Adam Smith notes that specialization increases productivity. Which of the following was the cause of this phenomenon?
division of labor
In the circular flow model, who supplies factors of production in exchange for income?
households
Allocative efficiency occurs when
we are producing at a point on the PPF such that marginal benefit at the quantity produced equals marginal costs
Production efficiency is a situation in which the economy is getting all that it can from its resources and _____ produce more of one good or service without producing ____ of something else
Cannot; less
Which of the following is an example of comparative advantage?
Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes
In the circular model, which of the following refers to markets where goods such as computers or services such as medical treatment are offered?
Goods Markets
As an economy experiences economic growth, shares of production shift:
Initially from agriculture to industry and then from industry to services
Absolute advantage is the ability of an individual, firm, country to
Produce more of a good service than competitors using the same amount of resources
What are copyrights designed to accomplish?
Protect intellectual property rights
The principle of increasing opportunity cost states that the more resources devoted to any activity,
The mallet the payoff to devoting additional resources to that activity
Which of the following is critical to the success of the market system?
To allow individuals or firms to have exclusive use of their property
What is the name given to the highest-valued alternative that must be given up to engage in any activity?
opportunity cost