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5 Written questions

5 Matching questions

  1. production possibility frontier (PPF)
  2. price
  3. comparative advantage
  4. allocative efficiency
  5. logical choice
  1. a the amount that a product sells for per unit
  2. b the assumption that economic actors are consistent and logical in making choices
  3. c a graphical illustration that shows the maximum quantity of one good that can be produced, given the quantity of the other good being produced
  4. d production of the combination of goods and services that provides the most net benefit to society. the optimal quantity of a good is achieved when MB=MC of the next unit. This only occurs at one point on the PPF
  5. e exists if a producer can produce at a lower opportunity cost than all other producers

5 Multiple choice questions

  1. the difference between the benefit and the cost of any activity
  2. fairness of economic outcomes
  3. a formal statement of a theory, describing the relationship between two or more variables
  4. involves building models of behavior, making statements about cause and effect, action and reaction
  5. goods used to produce other goods or services over time

5 True/False questions

  1. opportunity costthe process by which resources are transformed into useful forms


  2. normative economicsstudies economic behavior without making judgements--describes what exists and how it works


  3. productionthe process by which resources are transformed into useful forms


  4. marginal analysisthe next unit or increment of an action


  5. production possibilitiesdifferent quantities of goods that an economy can produce with a given amount of scarce resources