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5 Written questions

5 Matching questions

  1. variable
  2. production possibility frontier (PPF)
  3. marginal benefit (MB)
  4. command economy
  5. consumer sovereignty
  1. a a graphical illustration that shows the maximum quantity of one good that can be produced, given the quantity of the other good being produced
  2. b a central government either directly or indirectly sets output targets, income, and prices
  3. c the idea that consumers ultimately dictate what will be produced (or not produced) by choosing what to purchase (and what not to purchase)
  4. d the additional benefit received from the consumption of the next unit of a good or service
  5. e a measure that can change from observation to observation

5 Multiple choice questions

  1. a market in which profit opportunities are eliminated almost instantaneously
  2. involves the compilation of data that describes phenomena and facts
  3. specialization and free trade will benefit all trading parties, even those that may be absolutely more efficient producers
  4. the best alternative that we forgo, or give up, when we make a choice or a decision
  5. 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 True/False questions

  1. specializationthe condition in which output is steady or growing, with low inflation and full employment of resources

          

  2. absolute advantageexists if a producer can produce at a lower opportunity cost than all other producers

          

  3. investmentthe process of using resources to produce new capital

          

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

          

  5. economicsthe branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units--that is, business firms and households