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18 Cards in this Set
- Front
- Back
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The factors of production include ____________________, _______________________,
_______________________, ____________________, and ___________________. |
land, labor, physical capital, human capital,
entrepreneurship |
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People tend to specialize in those activities for which they have (a comparative, an absolute)
advantage. |
a comparative
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When people choose jobs that maximize their income, they are specializing according to their
_________________ advantage. |
comparative
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If at a zero price quantity demanded exceeds quantity supplied for a good, that good is a(n)
_____________________; if at a zero price quantity supplied exceeds quantity demanded for a good, that good is a(n) _______________________. |
economic good; economic “bad”
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The ____________________ of good A is the highest-valued alternative that must be sacrificed
to attain it. |
opportunity cost
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If the opportunity cost of additional units of a good remains constant, the production possibilities
curve will be (linear, bowed outward); if the opportunity cost of additional units of a good rises, the production possibilities curve will be (linear, bowed outward). |
linear; bowed outward
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Because specialized resources are more suited to specific tasks, the opportunity cost of producing
additional units of a specific good will (rise, fall). |
rise
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If an economy is inefficient, its actual output combination will lie (inside, outside) the production
possibilities curve. |
inside
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T F 1. Most individuals’ needs exceed their wants.
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F Wants vastly exceed needs (which cannot be defined anyway) for everyone.
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T F 2. Because resources are scarce, the goods that they produce are also scarce.
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T
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T F 3. For most activities no opportunity cost exists.
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F An opportunity cost exists for all activities.
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T F 4. If a production possibilities
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F A linear PPC implies a constant cost of production.
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T F 5. At any given moment in time, it is impossible for an economy to be inside its production
possibilities curve. |
F All an economy need be is inefficient to be inside the PPC.
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T F 6. The opportunity cost to a motorist of the time that she is stuck in traffic is the next-highest
value of the equivalent amount of time. |
T
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T F 7. People have little incentive to specialize in jobs for which they have a comparative
advantage. |
F People can earn more income in jobs for which they have a comparative advantage.
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T F 8. Economic growth shifts the production possibilities curve outward.
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T
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T F 9. If the price to a specific user is zero, the good must be a noneconomic good.
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F An individual user may pay a zero price for a good, but that does not necessarily mean it is a
noneconomic good. |
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T F 10. Evidence indicates that developing new technologies, specializing, and engaging in trade
helped Homo sapiens win out over Neanderthals. |
T
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