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