MACROECONOMICS (BUS 2513) QUIZ STUDY GUIDE

If Al has an absolute advantage over Beth in preparing meals, then:

Al can prepare more meals in a given time period than Beth.

When two people agree to a price in a negotiation, we can assume that:

both parties will benefit.

A movement along a demand curve from one price-quantity combination to another is called:

a change in quantity demanded.

In Cuba, a bureaucratic committee makes the production decisions for the country's firms and factories. Therefore, Cuba is an example of a:

centralized economy.

In general, individuals and nations should specialize in producing those goods for which they have a(n):

comparative advantage.

Larry has a comparative advantage over his classmates in writing term papers if he:

has a lower opportunity cost of writing term papers than his classmates.

According to the Principle of Increasing Opportunity Cost, in expanding the production of any good, we should start by utilizing the resources that:

have the lowest opportunity cost.

The buyer's reservation price of a particular good or service is the:

maximum amount the buyer would be willing to pay for it.

A graph that illustrates the maximum amount of one good that can be produced for every possible level of production of the other good is called a(n):

production possibilities curve.

Outsourcing is a term increasingly used to refer to the act of:

replacing relatively expensive American workers with low-wage workers overseas.

unskilled workers in the United States to lose their jobs.

shift outward.

Efficiency occurs when:

the socially optimal quantity of goods and services is being produced.

Points that lie outside the production possibilities curve are ________, and points that lie inside the production possibilities curve are ________.

unattainable; attainable

One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:

unskilled workers in the United States to lose their jobs.

If you have a comparative advantage in a particular task, then:

you give up less to accomplish that task than do others.