Self-Quiz Unit 1 - Chapter 2

A person who seeks to earn profits by finding ways to organize factors of production is called a/an:

entrepreneur

In market capitalism:

factors of production are privately owned and decisions are made privately

If the production possibilities curve were a straight line sloping down from left to right, this would suggest that:

no factor of production has any particular comparative advantage over other resources

Government's role of taxing some citizens and transferring income to others is considered:

redistributing income

In this exhibit (Guns and Butter), the combination of guns and butter at point H:

cannot be attained given the level of technology and the factors of production available

When moving along a production possibilities curve, the opportunity cost to society of getting more of the good on the horizontal axis:

is measured by the amount of the other good that must be given up

Technology is:

knowledge that can be applied to the production of goods and services

Increasing the level of education in the United States will:

lead to workers possessing greater human capital

Resources from nature that can be used to produce other goods and services are called:

natural resources

Efficient production implies that it is:

not possible to produce more of one good without producing less of another good