Econ Exam 1

production possibilites frontier can shift outward

if there is a technological improvement

more need for a strong legal system t control individual greed than would be needed in a centrally-planned economy

in an economy, in which decisions are guided by prices and individual self interest, there is

the 2 countries wish to take advantage of the principle of comparative advantage

when 2 countries trade with one another, it is most likely because

increases as more of the good is produced

when a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

there are unused resources or inefficiencies in the economy

when an economy is operating inside its production possibilities frontier, we know that

both countries are better off

when the France trades with Russia

with trade, one country wins and one loses

which of the following statements about trade is false

government intervention

if an externality is present in a market, economic efficiency may be enhanced by

the enjoyment she would have received had she watched the video

Denise decides to spend 3 hours working overtime rather than watching a video with her friends. she earns $10 an hours. her opportunity cost of working is

people face trade offs

Sophia os planning her activities for a hot summer day. she would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. this illustrates the basic principle that

market failure

a situation in which the market on its own fails to allocate resources efficiently

individuals' pursuit of self-interest

according to Adam Smith, the success of decentralized market economies is primarily due to

it is impossible to produce more of one good without producing less of the other

an economy's production of 2 good is efficient if

has a comparative advantage in the production of corn

if Iowa's opportunity cost of corn is lower than Oklahoma's cost of corn, then

has an absolute advantage in the production of donuts

if Shawn can produce more donuts in one day than sue can produce in one day, then

good idea, since doing so helps to simplify the complex world and make it easier to understand

for an economist, the idea of making assumptions is regarded generally as a

are more efficient

one advantage market economies have over centrally-planned economies is that market economies

the more resources a society uses to produce one good, the fewer resources it has available to produce another good

production possibility frontiers are usually bowed outward. this is because

has an absolute advantage in the production of that good

the producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

a market failure caused by an externality

thousands of people develop lung cancer form 2nd hand exposure to cigarette smoke. this is an example of

each person spends more time producing that product in which he or she has a comparative advantage

total output in an economy increases when each person specializes because

economists devise theories, collect data, and analyze the data to test the theories

with respect to how economists study the economy, which of the following statements is most accurate?

the marginal benefit of going to Spain increases

you have chosen Ireland and Spain for your study abroad program next year. however, the deadline for you final decision is still months away and you may reverse this decision. which of the following events would prompt you to reverse this decision?