Microeconomics, Chapter 2
The theory of comparative advantage says that countries
Should export those goods they can produce at a lower opportunity cost than another country
An increase in the quantity and or quality of labor available could be due to each of the following except
Strict immigration policy enforcement
David Ricardo
Suggested that countries would benefit from trade
Select the correct definition of the term comparative advantage
The Ability to produce a good or service at a lower opportunity cost than another
For a country to have a comparative advantage any good, it must have
A lower opportunity cost of producing that good
labor
Anika, a server at sonic drive in Your coworkers Your favorite bartender
Entrepreneurs
Aunt Sally's jammin jellies ( the business) Brandon's Taco truck (the idea)
A market economy is also known as a blank? economy, and decisions are made by ?
Capital list; private individuals
Land as a productive resource does not include:
Computers
The limits on international trade include all of these except:
Decreasing opportunity cost and increasing returns
Which of these encourages economic growth?
Education
Which resource earns profits
Entrepreneurs
Which statement about entrepreneurs is not correct?
Entrepreneurs do not take on any Business risks
As used by economist, the term capital includes the human talent one is born with
False
Capital refers to the total amount of money and hedge and venture capital funds
False
Natural resources, such as water are included in capital resources
False
The resource category capital refers to financial assets, such as bank accounts, bonds, certificates of deposits, and stocks.
False
Capital
Farmer Cameron's tractor Brandon's Taco truck ( the truck itself)
If a producer has a comparative advantage, then she has selected the activity that
Has the lowest opportunity cost
Which of these results in a higher standard of living
Higher levels of education
International trade
Increases consumption possibilities
Natural resources such as copper deposits are
Land
When training with more developed countries,
Less developed countries have a comparative advantage in the production of some goods or services
According to a recent study by the organization for economic cooperation and development which of these results in a higher standard of living
Lower inflation rate
Which of these is not an economic factor of production
Money
A change from a technically or productively inefficient mix to an efficient mix of output would best be represented with a production possibility frontier as a
Movement from inside the PPF onto the PPF
If the government has been decided to spend less on the military and more on healthcare, the forgone spending on military items represents the:
Opportunity cost of the extra healthcare
land
Ore The Rio Grande Lake Tahoe
Full employment on a production possibilities frontier is shown by
Points on the PPF
Which is not an example of a behavior exhibited in a market economy?
The president of the European country of semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers
Which statement explains the trade off between today's consumption and future consumption
The production of more capital goods and fewer consumer goods today increases economic growth and future consumption
The derivation of a production possibility frontier assumes that
There is a fixed quantity of resources and technology available
A production possibilities frontier will have a curved or bowed out shape if opportunity cost are increasing
True
If countries specialize and then traded, world production would increase
True
The resource category entrepreneurial ability refers to business skills such as the management of resources, the drive to innovate, and the willingness to bear risk
True
The resource category labor refers to the mental and physical productivity of workers
True
The resource category land refers to all natural resources, including fertile land, forest, mineral deposits, solar and wind energy, and water
True
Which is not one of the three basic economic questions that each society must answer
Who decides what goods and services are in demand
All of these are considered human capital, except
Working in a factory
Market oriented activities- planned economy activities
•Buyers and sellers make all production and consumption decisions •The government attempts to induce certain production and consumption decisions using monetary incentives •The government regulate some production and consumption decisions •The government makes all production and consumption decisions