For an economy that is operating inside its production possibilities curve, which of the following is true?

It can increase the production of both goods.

Any point inside the production possibilities curve is...?

associated with inefficient use or unemployment of some resources

Scarcity exists because

human wants exceed the productive capacity of the economy

The concept of opportunity cost would no longer be relevant if

the supply of all resources were unlimited.

The opportunity cost of an activity is

the value of the forgone benefit of the next best alternative

Define Comparative Advantage

Ability to produce a product at a lower opportunity cost

What are the 4 factors of production?

Land, Labor, Capital and Entrepreneurship

What does constant opportunity cost mean?

you produce more of item 1, opportunity cost stays the same

Which of the following would shift a country’s production possibilities curve inward(to the left)?

A reduction in the size of the country’s labor force

Factors of production

Land, Capital, Labor, Entrepreneurship

If two nations specialize according to their individual comparative advantages and engage in trade, then...

Both nations can consume beyond their individual production possibilities.

If a combination of goods or services lies outside the PPC (production possibility curve) of an economy, which is true?

Resources aren't available to achieve combination of goods & services

Which of the following is always true of an economy operating on its production possibilities frontier?

Its resources are fully employed.

studbud

AP Macroeconomics 1.1-1.3 Quiz

21 termsStudBud Administration784 plays

Imported from external platform

Flashcards21 cardsFPractice quizPHost liveL

Questions 21

Answers

1
For an economy that is operating inside its production possibilities curve, which of the following is true?
It cannot move to a point on the PPC with available technology.
It can increase the production of both goods.
It is using all available resources efficiently.
Its population is growing faster than the economy can increase production.
2
Which of the following is the most fundamental issue that economics addresses?
Choice of appropriate technology
Reduction of budget deficit
Use of scarce resources
Reduction of unemployment
3
Any point inside the production possibilities curve is...?
allocatively efficient but technologically inefficient
associated with inefficient use or unemployment of some resources
associated with constant opportunity costs
efficient
4
Scarcity exists because
population and labor force growth are slowing
human wants exceed the productive capacity of the economy
innovation causes unemployment
physical capital does not depreciate
5
The three shifters of the PPC include all of the following except
change in trade
change in employment
change in technology
change in resource quantity or quality
6
Which of the following is an example of a factor of production?
competition
economy of scale
labor
free market
7
The concept of opportunity cost would no longer be relevant if
poverty in an economy no longer existed.
real wages were flexible.
the supply of all resources were unlimited.
8
The opportunity cost of an activity is
the value of the benefit received from performing the activity
the amount of time spent on the activity
the sum of benefits from all the sacrificed alternatives
the value of the forgone benefit of the next best alternative
9
Define Comparative Advantage
makerRecord of all transactions
Ability to produce a product at a lower opportunity cost
tax on imported goods
Ability to produce more unit of a product than other maker
10
What are the 4 factors of production?
Effort, Intelligence, Energy, and Excellence
Land, Money, Energy, and Time
Land, Labor, Capital and Entrepreneurship
Materials, Money, Market and positive vibes
11
What does constant opportunity cost mean?
you produce more of item 1, opportunity cost increases for item 2
you produce more of item 1, opportunity cost stays the same
you produce more of item 1, opportunity cost decreases for item 2
you produce more of item 1, and can't produce more of item 2
12
A production possibilities curve that is bowed out implies that as more of a good is produced the opportunity cost
decreases
increases at first and then decreases
remains constant
increases
13
Who has the comparative advantage in producing coffee?(hint:is this input,other/under or output, other/over)
Brazil
Peru
14
Which of the following would shift a country’s production possibilities curve inward(to the left)?
A reduction in the country’s real interest rate
A reduction in the size of the country’s labor force
An increase in the typical retirement age in the country
A reduction in the country’s inflation rate
15
Factors of production
Land, Capital, Labor, Entrepreneurship
Land, Money, Labor, Entrepreneurship
Land, Labor, Utility, Entrepreneurship
Land, Product, Utility, Entrepreneurship
16
If two nations specialize according to their individual comparative advantages and engage in trade, then...
Both nations can consume beyond their individual production possibilities.
Nations would be better off if they were self-sufficient.
If one nation gains from trade, then the other nation will lose.
Both nations can consume only what they produce.
17
If a combination of goods or services lies outside the PPC (production possibility curve) of an economy, which is true?
Effective trade barriers have reduced foreign imports into the economy.
Resources are being used at a more rapid rate than they were in the past
New technology is being used in production
Resources aren't available to achieve combination of goods & services
18
All societies face a trade-off for every decision for which of the following reasons?
Resources are scarce.
Some resources are always unemployed.
Resources have no alternative uses.
Resources are not allocated efficiently.
19
Who has the comparative advantage in bikes?
Factory X
Factory Y
20
Which of the following is always true of an economy operating on its production possibilities frontier?
It must be a command economy.
It is allocatively efficient.
It cannot trade with other nations
Its resources are fully employed.
21
If producing each additional unit of good X required giving up ever-increasing amounts of good Y, the PPC would be
a straight line
upward sloping
bowed outward
bowed inward

AP Macroeconomics 1.1-1.3 Quiz Flashcards | StudBud