ECON 2106 Test 1 (ch.1-5)
Capital accumulation is the _____, including _____ capital.
growth of capital resources; human
When your university chooses to spend more on football equipment and less on computer equipment, its choice illustrates
a tradeoff
The table gives some data on the supply of maple syrup in a small town. Price Quantity supplied (dollars per can) (cans per day) 9 49 11 51 When the price rises from $9 a can to $11 a can, the elasticity of supply is _______.
0.20
The figure shows the market for haircuts. What is the maximum total surplus? (the supply and demand curve intersect at (10,15). supply follows: (0,5) (5,5) (10,15) (15,20) (20,25). demand follows (0,25) (5,20) (10,15) (15,10) (20,5) 1) The maximum total surplus is ______. 2) This maximum total surplus occurs when the quantity produced is _____ haircuts a day.
1) $100 2) 10
Rain spoils the strawberry crop, the price of strawberries rises from $6 to $8 a box, and the quantity demanded decreases from 600 to 200 boxes a week. Calculate the price elasticity of demand over this price range. (Note: Always use the average price and average quantity to calculate the percentage changes in the formula for prie elasticity of demand. The average price is the same as the midpoint of the old and new price. The average quantity is the same as the midpoint of the old and new quantity.) 1) Over the price range of $6 to $8, the price elasticity of demand is ________. 2) Over this price range, the demand for strawberries is ______.
1) $3.50 2) elastic
The graph shows the marginal cost curve of hot tubs. (MC linear line follows (1,1) (2,2) (3,3) and so on until 6). What is the marginal cost of producing the 1 millionth hot tub? 1) The marginal cost of producing the 1 millionth hot tub is ____ swimming pools. 2) The marginal cost curve is upward sloping because _______.
1) 1 2) resources are not all equally productive in all activities
Kim can produce 40 pies per hour or 400 cakes per hour. Liam can produce 100 pies per hour or 200 cakes per hour. 1) Kim's opportunity cost of producing a pie is ____ cakes. 2) Liam's opportunity cost of producing a pie is ____ cakes. 3) _______ has the comparative advantage in producing pies. 4) _______ has the comparative advantage in producing cakes. 5) Kim spends 30 minutes producing pies and 30 minutes producing cakes, Kim produces _____ pies and _____ cakes. 6) If Liam spends 30 minutes producing pies and 30 minutes producing cakes, Liam produces ______ pies and _____ cakes.
1) 10 2) 2 3) liam 4) kim 5) 20 ; 200 6) 50 ; 100
The table shows Westland's production possibilities. Tea Hiking boots (pounds per month) (pairs per month) 200 0 100 400 50 600 0 800 1) The marginal cost of a pound of tea when the quantity produced is 75 pounds of tea per month is _______. 2) The marginal cost curve in Westland is _______.
1) 4.00 pairs of hiking boots 2) a horizontal line
A rise in the price of a smoothie from $2 to $3 results in a decrease in the quantity of smoothies demanded from 220 million to 180 million a day; and at today's price of a muffin, $1.50, the quantity of muffins demanded increases from 80 million to 100 million a day. 1.) Calculate the percentage change in the price of a smoothie and the percentage change in the quantity demanded of smoothies. Hint: Use the average price and average quantity to calculate the percentage changes. The price of a smoothie changes by _______ percent and the quantity demanded of smoothies changes by _______ percent. 2) Calculate the price elasticity of demand for smoothies. The price elasticity of demand for smoothies is _______. 3) 3. Is the demand for smoothies elastic or inelastic? The demand for smoothies is _____________.
1) 40 ; 20 2) 0.5 3) inelastic
Tony and Patty produce skis and snowboards. The tables show their production possibilities. Tony produces 3 snowboards and 24 skis a week; Patty produces 6 snowboards and 3 skis a week. Tony's Production Possibilities Snowboards Skis (per week) (per week) 15 0 12 6 9 12 6 18 3 24 0 30 Patty's Production Possibilities Snowboards Skis (per week) (per week) 12 0 6 3 0 6 1) ________ has a comparative advantage in producing snowboards. 2) ________ has a comparative advantage in producing skis. 3) If Tony and Patty specialize and trade, _____ specializes in snowboards and produces _____. 4) If Tony and Patty specialize and trade, _____ specializes in skis and produces _____. 5) The number of snowboards produced ______________ by ______. 6) The number of skis produced ______________ by ______.
1) Patty 2) Tony 3) Patty ; 12 snowboards 4) Tony ; 30 skis 5) increases ; 3 6) increases ; 3
What does the sign (positive/negative) of the income elasticity tell us about a good? 1) A good with an income elasticity greater than one is ______. A good with an income elasticity that is positive and less than 1 is ______. 2) A good with an income elasticity that is negative is _______.
1) a normal good that is income elastic; a normal good that is income inelastic 2) an inferior good
The table shows Weston's preferences. The marginal cost of producing a pair of boots is 4 pounds of tea per month. Boots Willingness to pay (pairs per month) (pounds of tea per pair) 10 6 25 4 40 2 Draw three points. Plot the marginal benefit when the quantity of boots is 10, 25, and 40 pairs. Draw the marginal benefit curve. Label it MB. 1) The marginal benefit from a good is the _____ the good. 2) When Weston achieves allocative efficiency, marginal benefit equals ____ pounds of tea per month.
1) benefit received from consuming one more unit of 2) 4
(the figure: supply and demand intersect at (100, 10) ; supply follows: (0,5) (100,10) (200,15) ; demand follows: (0,20) (50,15) (100,10) (150,5) (200,0)) 1a) At the market equilibrium, calculate consumer surplus. 1b) At the market equilibrium, calculate producer surplus. 2) Is the market for sunscreen efficient? Why? The market for sunscreen _____ efficient because _____.
1) consumer surplus is $500 2) producer surplus is $250 3) is; total surplus is maximum
Dairies make low-fat milk from full-cream milk, and in the process they produce cream, which is made into ice cream. Explain the effect of the following events on the supply of low-fat milk. 1) If the wage rate of dairy workers rises, the supply of low-fat milk _______. 2) If the price of cream rises, the supply of low-fat milk _______. 3) If the price of low-fat milk rises, the supply of low-fat milk _______. (Note this question asks about "supply" not "quantity supplied.")
1) decreases because the cost of producing low-fat milk increases 2) increases because cream and low-fat milk are complements in production 3) does not change because the relationship between price and quantity supplied does not change
What is producer surplus? How is it measured? 1) Producer surplus is the _______. 2) Producer surplus is calculated as the ______ a good minus ______, summed over the quantity sold. 3) Suppose that the price of a cashmere sweater is $250 and Jean's marginal cost of producing a cashmere sweater is $175. What is Jean's producer surplus?
1) excess of the amount received from the sale of a good over the cost of producing it 2) price received for; its marginal cost (or minimum supply-price) 3) jean's producer surplus is $75
Quantity demanded (paninis per week) Price Anne Debbie Mary (dollars per panini) 5.00 2 1 0 7.50 4 2 1 10.00 6 3 2 1) What is the relationship between individual supply and market supply? The market supply curve is the ______ sum of the individual supply curves. It is formed by adding ______. 2) Sarah, Kirk, and Jean are the only producers of panini sandwiches in an isolated village. The table shows their weekly supply of paninis. When the price of a panini is $7.50, what is the quantity of paninis supplied by the market in a week?
1) horizontal; the quantities supplied by all the producers at each price 2) The quantity supplied by the market is 7 paninis a week.
( on the graph, the points are: (6, 80) (12,60) (18,40) and (24,20) with quantity on the x-axis and price on the y-axis) 1) If the price of an amusement park ticket falls from $60 to $20, while all other influences on buying plans are unchanged, the quantity of amusement park tickets demanded _______. 2) If the price of an amusement park ticket falls from $60 to $20, while all other influences on buying plans are unchanged, the quantity of amusement park tickets demanded changes from _____ to _____. 3) The change in the price of an amusement park ticket illustrates the law of demand in action.
1) increases 2) 12 million; 24 million 3) true
1) What is consumer surplus? Consumer surplus is the ______ of a good in excess of ______, summed over the quantity bought. 2) Suppose that the price of a cashmere sweater is $100 and Jean's marginal benefit from a cashmere sweater is $300. If Jean buys 1 cashmere sweater, what is her consumer surplus?
1) marginal benefit; the price paid for it 2) jean's consumer surplus is $200
The figure shows the circular flows in the market economy. 1) When Apple Inc. pays the designers of the iPad, the flows are a ______ from firms to households and a ______ from households to firms. 2) When you buy a new e-book from Amazon, the flows are a ______ from households to firms and a ______ from firms to households.
1) money flow; real flow 2) money flow; real flow
What does the sign (positive/negative) of the cross elasticity of demand tell us about the relationship between two goods? 1) If the cross elasticity of demand for pasta with respect to the price of a pizza is positive, then pasta and pizza are ______. 2) If the cross elasticity of demand for ski trips with respect to the price of a ski jacket is negative, then ski trips and ski jackets are ______.
1) substitutes 2) complements
What is the effect on the price and quantity of smartphones if the wage rates of workers who produce smartphones fall? The graph shows the demand curve for smartphones and the supply curve of smartphones. 1) Draw a point at the equilibrium price and quantity of smartphones. Label it 1. 2) Draw a second supply curve that shows what happens in the market for smartphones if the wage rates of workers who produce smartphones fall but all other influences on selling plans remain the same. Label the curve S1. 3) Draw a point at the new equilibrium price and quantity. Label it 2.
1) the equilibrium point is the intersection between the supply and demand curves 2) shift the supply curve to the right. 3) the new equilibrium point is the intersection between the new supply curve and original demand curve
Why does demand not change when the price of a good changes with no change in the other influences on buying plans? Consider the demand for DVD players. 1) The demand for DVD players does not change when a change in _______ occurs. 2) An increase in the price of a DVD player _______.
1) the price of a DVD player 2) decreases the quantity of DVD players demanded and results in a movement up along the demand curve for a DVD player
Define the price elasticity of demand and show how it is calculated. 1) The price elasticity of demand is a units-free measure of the responsiveness of ______. 2) The price elasticity of demand is calculated by dividing the _______ by the _______.
1) the quantity demanded of a good to a change in its price when all other influences on buying plans remain the same 2) percentage change in the quantity demanded; percentage change in the price
1) Taxes lead to ______ and subsidies lead to ______. 2) Price regulations that put a cap on the rent a landlord is permitted to charge lead to ______. A monopoly leads to ______.
1) underproduction; overproduction 2) underproduction; underproduction
Indicate whether each of the following news items is a positive or a normative statement. 1. The poor pay too much for housing. 2. A ban on smoking will lower the Medicare budget. 3. The United States should spend more on the environment and less on space exploration. 4. More police on inner-city streets will lower the crime rate. Statement 1 is a ______ statement, and statement 2 is a ______ statement. Statement 3 is a ______ statement, and statement 4 is a ______ statement.
1. normative 2. positive 3. normative 4. positive
Both Mia and Mario produce only the item in which they have a comparative advantage. Then they trade one pasta for one pizza. (where Mario and Mia's PPF intersect is (2,2) Before specialization and trade started, Mia and Mario were each producing 2 dishes of pasta and 2 pizzas an hour. The total gains from trade are ______ dishes of pasta and ______ pizzas an hour.
2 , 2
The graph shows the marginal cost of producing stuffed animals and the marginal benefit from stuffed animals in Oakdale. (where the MB and MC lines intersected was (4 stuffed animals per hour, 6 dolls per stuffed animal) Oakdale achieves allocative efficiency if _______.
4 stuffed animals an hour are produced
Think about the following news items. Which items involve a microeconomic issue and which involve a macroeconomic issue? A. WHO recommends tax of at least 20% on sugary drinks B. Pay to rise for millions as 19 states increase minimum wage C. The U.S. is borrowing less from China, more from everybody else D. More police, managed more effectively, really can reduce crime Statement A involves a ______ issue. Statement B involves a ______ issue. Statement C involves a ______ issue. Statement D involves a ______ issue.
A. micro B. micro C. macro D. micro
The figure shows the demand curve for DVD rentals. Suppose that the price of renting a DVD rises but all other influences on renters' plans remain the same. Show the effect in the graph. Draw either an arrow on the demand curve showing the direction of change or a new demand curve. 1) If the price of renting a DVD rises, a ______ the demand curve occurs. If any factor that influences buying plans other than the price changes, then a ______ the demand curve occurs.
Draw an arrow directly on the demand curve going up 1) movement up along; shift of
The figure shows the supply curve of milkshakes. Draw an arrow to show what happens to firms' plans if the price of a milkshake rises but all other influences on selling plans remain the same. 1) If the price of a milkshake rises, a ______ the supply curve occurs. If any factor that influences selling plans other than the price changes, then a ______ the supply curve occurs.
Draw an arrow directly on the supply curve going up 1) movement up along; shift of
Resource use is efficient when _______.
it is not possible to make someone better off without making someone else worse off
When the price of a smartphone increases by 5 percent, the quantity of wireless plans demanded decreases by 4 percent. Calculate the cross elasticity of demand for wireless plans with respect to the price of a smartphone.
The cross elasticity of demand for wireless plans with respect to the price of a smartphone is -8. smartphones and wireless plans are complements
The table gives the demand and supply schedules for T-shirts. What is the equilibrium price of a T-shirt and the equilibrium quantity of T-shirts per day? Price QD QS ($/T-shirt) (per day) (per day) 1 90 60 2 75 75 3 60 90 4 45 105 5 30 120 6 15 135
The equilibrium quantity of T-shirts 75 a day. The equilibrium price is $2 a T-shirt.
When income increases by 2 percent and all prices remain the same, the quantity of smartphones demanded increases by 8 percent. Calculate the income elasticity of demand of smartphones.
The income elasticity of demand of smartphones is 4.
If the quantity demanded of fried chicken decreases by 80 percent when the price of fried chicken rises by 20 percent, what is the price elasticity of demand for fried chicken?
The price elasticity of demand for fried chicken is 4.
If the quantity demanded of gasoline increases by 5 percent when the price of gasoline falls by 10 percent, what is the price elasticity of demand for gasoline? Based on the number you've calculated, the demand for gasoline is _______.
The price elasticity of demand for gasoline is .5 inelastic
Anne, Debbie, and Mary are the only popcorn consumers in an isolated village. The table shows their demand schedules for popcorn each week. When the price of a bag of popcorn is $0.50, what is the quantity of bags of popcorn demanded by the market in a week? Quantity demanded (bags per week) Price Anne Debbie Mary (dollars per bag) 0.50 5 2 5 0.75 4 1 3 1.00 3 0 1
The quantity demanded by the market is 12 bags a week
Which of the following is the opportunity cost of attending a ball game?
The things you would have bought with what you spent on the ticket and bus fare getting to the game plus the things you would alternatively have done with your time.
The demand for plums is unit elastic if _____.
a 5 percent rise in the price of plums results in a 5 percent decrease in the quantity of plums demanded
When Apple Computers decides to produce iPods by using more labour and less capital, it is answering ______ question. When Sony decides to produce computers rather than DVD players, it is answering ______ question. Whether Sony gets a larger profit or its workers get higher wages is _______ question.
a how a what a for whom
Complete the following sentence. If, as Miles's income increases, his demand for magazines increases, then for William, magazines are _______.
a normal good
An incentive is _______.
a reward that encourages an action or a penalty that discourages an action
All of the following are consequences of scarcity faced by people in the United States except deciding _______. a) whether or not Pluto should be classified as a planet b) whether to play the piano or study for the next hour c) how to study for both an economics exam and a chemistry exam that take place on the same day d) whether to go skiing during spring break or to catch up on your course work
a) whether or not Pluto should be classified as a planet
A rational choice _______.
achieves the greatest benefit over cost for the person making the choice
What is an external benefit? An external benefit is a benefit that _______.
affects someone other than the buyer of a good
The graph shows Yucatan's PPF for food and sunscreen. (graph is a linear line decreasing by 50 on the y axis and increasing by 25 on the x axis) Complete the following sentence. Yucatan faces ______ opportunity cost of food and ______ opportunity of sunscreen, which can be seen by the shape of the PPF.
a constant; a constant
Which of the following statements is an example of transaction costs? a) Microsoft's profit dropped by 5 percent last quarter. b) I paid a commission to the real estate broker when I bought my house. c) An increase in wages has increased labor costs in China. d) A hike in taxes results in underproduction.
b) I paid a commission to the real estate broker when I bought my house.
The marginal benefit of a good or service is the _____.
benefit received from consuming one more unit of it.
The production possibilities frontier is the boundary between the combinations 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
Total surplus is the sum of _____ and _____.
consumer surplus; producer surplus
Choose the correct statement. a) entrepreneurship decreases over time b) entrepreneurship includes the tools and instruments that we work with c) entrepreneurship is not a factor of production d) entrepreneurs make business decisions
d) entrepreneurs make business decisions
An increase in the price of leather jackets, a complement in production of beef, will ______ the equilibrium price of beef and ______ the equilibrium quantity of beef.
decrease ; increase
Market failure is a situation in which the market _____ .
delivers an inefficient outcome
Capital accumulation and technological change bring economic growth: Production that was unattainable yesterday becomes attainable today; production that is unattainable today will become attainable tomorrow. Why doesn't economic growth bring an end to scarcity one day? This process of economic growth _______.
does not eliminate scarcity because we still must give up production of one good to increase production of a second good and remain on the new production possibilities frontier
What is the big tradeoff? The big tradeoff is the tradeoff between _______.
efficiency and fairness
If the quantity of dental services demanded increases by 15 percent when the price of dental services falls by 10 percent, is the demand for dental services inelastic, elastic, or unit elastic? The demand for dental services is _______.
elastic
The graph shows the competitive market for smartphones. Draw a point at the equilibrium price and equilibrium quantity of smartphones. Draw the consumer surplus. Label it CS. Draw the producer surplus. Label it PS. 1) The total surplus is _______. 2) The efficient quantity of smartphones is _______. 3) The market for smartphones _______ efficient because _______.
equilibrium price is where supply and demand intersect. consumer surplus is the triangle above equilibrium and to the left. producer surplus is the triangle below equilibrium and to the left. 1) $2250 2) 100 3) is; the equilibrium quantity is the efficient quantity
The night before a calculus test, you decide to go to the movies instead of working problem sets. You get 85 percent on your test compared with the 90 percent that you normally score. You ______, and the opportunity cost of your evening at the movies was ______.
faced a tradeoff between a higher test score and an evening at the movies; the 5 percent fall in your grade
Utilitarianism is a principle that states that we should strive to achieve "the _____ for the _____."
greatest happiness; greatest number
Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? (Point A, B, and C are all sitting on the PPF curve. Point A: (20,32) ; Point B (30,27) ; Point C (40,20) The PPF bows outward because as we move from point A to point B to point C, the opportunity cost of producing a jacket ______.
increases. Resources are not equally productive in all activities
What makes the demand for some goods elastic and the demand for other goods inelastic? The fewer the substitutes for a good or service, the more ______ is the demand for it. The smaller the proportion of income spent on a good, the more ______ is the demand for it.
inelastic ; inelastic
The table shows Yucatan's production possibilities. Food Sunscreen (pounds per month) (gallons per month) 100 0 50 250 20 400 0 500 Draw the four points defined in the table. Use the four-point line tool to draw the PPF. Label it. If Yucatan produces 50 pounds of food per month, it must produce _________ gallons of sunscreen to achieve production efficiency. The opportunity cost of 1 pound of food is ____ gallons of sunscreen. The opportunity cost of 1 gallon of sunscreen is _____ pounds of food.
just plot the points for the graph 250 gallons 5 gallons .20 pounds
Rent is the income paid for the use of _____. Wages are income paid for the services of _____. Profit (or loss) is the _____ earned by an entrepreneur for running a business. Interest is the income paid for the use of _____.
land; labor; income; capital
The supply of apples in the short run will be ______ than the supply in the long run and ______ than the momentary supply today.
less elastic; more elastic
Explain how the following headlines concern self-interest and the social interest: 1. Macy's, the New York department store, is opening in Paris, and Pizza Hut is expanding throughout Europe. 2. Vitamin jars must carry dose information.
macy's and pizza hut make decisions in their self-interest. dose information is in the social interest, but people decide whether to observe the dose information in their self interest.
Which of the following statements describes the big tradeoff? Sharing the pie more equally _____ .
makes it smaller.
A competitive market is a market that has _____, so _____ can influence the price.
many buyers and sellers; no single buyer or seller
The marginal benefit curve is a curve that shows the relationship between the _____.
marginal benefit from a good and the quantity consumed of that good
The marginal cost of a good or service is the _____.
opportunity cost of producing one more unit of it
Symmetry principle is the requirement that _____.
people in similar situations be treated similarly
William loves candy bars. As the price of a candy bar increases from $1.00 to $1.25 to $1.50, William continues to buy a dozen candy bars every week. William's demand for candy bars is _______.
perfectly inelastic
What does the cross elasticity of demand measure? The cross elasticity of demand is a measure of the responsiveness of the demand for a good to a change in the ______, other things remaining the same.
price of a substitute or complement
What are the influences on buying plans that change demand, and do these influences increase or decrease demand? Complete the following question about a change in demand. The graph shows a demand curve for coffee makers. Draw a demand curve that shows what happens in the market for coffee makers if the price of a coffee maker is expected to fall in the future, but all other influences on buying plans remain the same. Label the curve D1. 1) When an event occurs that changes the demand for coffee makers, _______ if demand increases and ______ if demand decreases.
shift the demand curve to the right 1) the demand curve shifts rightward; the demand curve shifts leftward
An increase in the demand for burgers together with a decrease in the supply of burgers brings a______ of burgers at the original price and a______ in their price.
shortage ; rise
Economic growth is defined as the _____ .
sustained expansion of production possibilities
What are the obstacles to achieving an efficient allocation of resources in the market economy? The obstacles to achieving an efficient allocation of resources in the market economy include _______.
taxes and subsidies, externalities, monopoly, and public goods
Which of the following statements is a normative macroeconomic statement?
the U.S. government should increase unemployment benefits
SpaceX Plans to Send Two People Around the Moon SpaceX CEO Elon Musk announced that SpaceX plans to send two citizens on a one-week 350,000 mile trip around the moon in 2018. The opportunity cost of creating the technology for trips around the moon is _______.
the decrease in the current production of other goods and services
Technological change is _____ new goods and of _____ of producing goods and services.
the development of; of better ways
Which of the following statements is a positive microeconomic statement?
the price of an iPad will fall over the next year
Demand is _____, when all other influences on buying plans remain the same.
the relationship between the quantity demanded of a good and the price of the good
All ideas about fairness can be divided into two broad groups: It's not fair if ______, and it's not fair if ______.
the result isn't fair; the rules aren't fair
Over what range of prices does a shortage arise? What happens to the price when there is a shortage? The graph shows the demand curve and the supply curve in the market for bicycles. Draw a horizontal line at a price at which there is a shortage of bicycles. Label it Shortage. 1) When a shortage arises, the price ______ to its equilibrium, which _______.
the shortage is drawn horizontally below the equilibrium point 1) rises; decreases the quantity demanded and increases the quantity supplied
Over what range of prices does a surplus occur? What happens to the price when there is a surplus? The graph shows the demand curve and the supply curve in the market for pretzels. Draw a horizontal line at a price at which there is a surplus of pretzels. Label it Surplus. 1) When a surplus arises, the price ______ to its equilibrium, which _______.
the surplus is drawn horizontally above the equilibrium point 1) falls; increases the quantity demanded and decreases the quantity supplied
Which of the following is the opportunity cost of attending a ball game?
the things you would have bought with what you spent on the ticket and bus fare getting to the game plus the things you would alternatively done with your time
By remaining in school, you are paying an opportunity cost that includes _______.
time you could have been playing soccer instead of studying
Deadweight loss is the decrease in _____ that results from an inefficient _____ or _____.
total surplus; underproduction; overproduction
How does the price elasticity of demand influence total revenue when a price cut occurs? If a price cut increases total revenue, demand is ______. If a price cut decreases total revenue, demand is ______. If a price cut leaves total revenue unchanged, demand is _______.
unit elastic
Allocative efficiency is a situation in which the quantities of goods and services produced are those that people _____ - it is not possible to produce more of a good or service _____ some of another good that people _____.
value most highly; without giving up; value more highly
Every day, we make many choices. We can't avoid having to make choices because ________.
we don't have enough time to do all the things we'd like to do
The figure shows the production possibilities frontier for a firm that produces pet food. (Point A is sitting on the PPF curve, B is outside the PPF) Complete the following sentences. Point A is ______ and point B is ______. This PPF ______ illustrate scarcity because ______.
attainable; unattainable does; the firm cannot produce points outside the frontier and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food
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
Preferences are _____.
people's likes and dislikes and the intensity of those feelings