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5 Written questions

5 Matching questions

  1. marginal benefit (MB)
  2. theory of comparative advantage
  3. marginal
  4. consumer goods
  5. investment
  1. a the additional benefit received from the consumption of the next unit of a good or service
  2. b the process of using resources to produce new capital
  3. c the next unit or increment of an action
  4. d specialization and free trade will benefit all trading parties, even those that may be absolutely more efficient producers
  5. e goods produced for present consumption

5 Multiple choice questions

  1. refers to the collection and use of data to test economic theories
  2. a formal statement of a theory, describing the relationship between two or more variables
  3. 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
  4. the assumption that economic actors are consistent and logical in making choices
  5. a graphical illustration that shows the maximum quantity of one good that can be produced, given the quantity of the other good being produced

5 True/False questions

  1. Ockham's razorinvolves building models of behavior, making statements about cause and effect, action and reaction


  2. economic theoryoccurs when an economy's production possibilities increase - usually caused by more resources, better resources, or improvements in technology. causes an outward shift in the PPF


  3. specializationwhen firms focus their resources on production of goods for which they have comparative advantage


  4. descriptive economicsinvolves the compilation of data that describes phenomena and facts


  5. free enterprisea market in which profit opportunities are eliminated almost instantaneously