Chapter 2

For a factor of production to be called capital it must:

The best example of a market capitalist economy is:

There is an important role for government in a market capitalist economy.

In drawing a production possibilities curve, it is assumed that:

Trade can be beneficial to an economy because:

Which of the following is not capital?

Governments often establish rules that influence how an economy operates. Which of the following rules will most likely increase the ability of society to produce goods and services?

Any point inside a production possibilities curve indicates:

If an economy is producing a combination of goods that places it on the production possibilities curve, then it has:

If all factors of production that are available for use under current market conditions are being utilized, then the economy has

Knowledge that can be applied to the production of goods and services is:

Money is a factor of production because it is part of capital.

A source of economic growth is:

The law of increasing opportunity cost is associated with the slope of the:

Improvements in technology will shift the production possibilities curve outward.

Assume that Brazil gives up 3 automobiles for each ton of coffee it produces, while Peru gives up 7 automobiles for each ton of coffee it produces.

Any factor of production is capital if it:

The concept of comparative advantage is based upon:

A point inside the production possibilities curve may indicate that resources are not being used efficiently.

An example of a natural resource is:

If an economy is producing a level of output that is on its production possibilities curve, the economy

The production of 14 units of consumer goods and 1 unit of capital goods per period would:

A source of economic growth is:

A production possibilities curve measures opportunity cost in dollar terms.

The slope of a typical production possibilities curve is:

Society's production possibilities curve is primarily concerned with answering the economic question of what goods and services a society can produce.

Comparative advantage and trade allow nations to specialize in the production of a larger number of different goods.

If an economy's factors of production were owned by the government sector and the coordinating activity was done by a government planning board, the economy would be called:

The slope of a production possibilities curve is based on opportunity cost.

Capital, labor, and natural resources combine to produce goods and services. Which of the following will not lead to an increase in the ability of an economy to produce goods and services?

Improvements in technology provide benefits to:

In a market capitalist economy:

Two components of labor are:

Government's role of providing national defense is considered:

Inefficient production or unemployment exists when the economy is ________ the production possibilities curve.

Technological improvements will:

One of the two criteria for a resource to be considered as a natural resource is that it must:

Without government, the "for whom" question could not be solved.