Economics Test :(

specialization and trade should lead to all of the following except:

a decrease in total economic output.

If the opportunity costs of production are constant, then the possibility curve is:

a straight line

Economists believe that resources should be used as efficiently as possible to:

achieve society's goals

an economy that has the lowest opportunity cost for producing a particular good is said to have an:

comparative advantage

countries that engage in trade will tend to specialize in goods in which they have a _____ and will _____ those goods.

comparative advantage; export.

economists know that a particular good can be classified as an inferior good if ______ in buyers' income causes _______.

decrease; decrease in demand.

positive economics deal with:

describes how the world does work

An economy has achieved _____ if it _____ pass up any opportunities to make some people better off without making others worse off.

efficiency; does not.

All points on the production possibility curve represent:

efficient production points.

an economy is said to have a comparative advantage if it:

has the lowest opportunity cost for producing a particular good.

Production possibility curves

illustrate the production choices available to an economy.

gains from trade exist for:

individuals, states, and countries

All points outside the production possibility curve represent:

nonfeasible production points.

The _____ illustrates the trade-offs facing an economy that produces only two goods.

production possibility curve.

We have to make choices because :

resources are scare and because choices involve a trade-off.

gains from trade arise because of:

specialization in production

economists generally believe that a country should specialize in the production of a good or service if:

the country can produce that product while forgoing fewer alternative products than any other country.

Specialization and trade usually lead to:

the exchange of goods and services in markets.

Increases in total output realized when individuals specialize in particular tasks and trade are known as:

the gains from trade