MicroEcon Prepare Chapter 2-
According to the theory of comparative advantage, specialization and free trade will benefit:
all trading partners who specialize in goods where they have comparative advantage
Ms. Boulware is the best lawyer and the best secretary in town. She has:
an absolute advantage in both jobs
In the United States, property rights:
are guaranteed by two amendments to the U.S. Constitution
In what type of economy does the government decide how most economic resources will be allocated?
centrally planned economy
What is the name given to the highest-valued alternative that must be given up to engage in any activity?
opportunity costs
When nations specialize in their comparative advantage and engage in trade:
overall standards of living increase
In the circular flow model, which of the following refers to markets where goods such as computers or services such as medical treatment are offered?
product markerts
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?
the division of labor
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
The role of the entrepreneur always involves:
taking risks