Economic growth is defined as the ? _____ .
A.
increase in wage rates
B.
recovery from recession
C.
sustained expansion of production possibilities
D.
overtaking of Canada by China
answer
C.
sustained expansion of production possibilities
question
Technological change is? _____ new goods and of? _____ of producing goods and services.
A.
the development? of; of better ways
B.
an increase in demand? for; a decrease in cost
C.
a change in the quantity supplied? of; of better ways
D.
a decrease in demand? for; an increase in cost
answer
A
Technological change is the development of new goods and of better ways of producing goods and services.
question
Capital accumulation is the? _____, including? _____ capital.
A.
development of new? goods; financial
B.
growth of capital? resources; human
C.
increase in? firms' profits; financial
D.
growth of real? GDP; physical
answer
B
Capital accumulation is the growth of capital? resources, including human capital.
question
What generates economic? growth?
Economic growth comes from? _______.
A.
capital accumulation and the avoidance of opportunity cost
B.
producing more goods than people want to consume
C.
capital accumulation and technological advance
D.
people being willing to increase their skills which makes economic growth free
answer
C
Two key factors influence economic? growth: technological change and capital accumulation.
Technological change is the development of new goods and of better ways of producing existing goods and services.
Capital accumulation is the growth of capital? resources, which includes human capital.
question
Complete the following statement.
The opportunity cost of economic growth? _______.
A.
is fewer consumption goods in the future
B.
is human capital
C.
is scarcity
D.
is fewer consumption goods today
answer
D
To expand production possibilities in the? future, a nation must devote fewer resources to producing consumption goods and some resources to accumulating capital and developing technologies.
And the faster we make our production? grow, the greater is the opportunity cost of economic growth.
question
Which of the following is an example of comparative advantage??
A.
Canada produces less textile products and more electronic products.
B.
Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk shakes.
C.
Michael Jordan is an American basketball player.
D.
Angela makes better pastries than Sherrie.
answer
C
The ability of a person to perform an activity or produce a good or service at a lower opportunity cost than anyone else is comparative advantage.
The statement? "Dave makes 4 pizzas giving up 6 jars of milk shakes while Rob makes 2 pizzas giving up 4 jars of milk? shakes," compares? Dave's and? Rob's opportunity costs of making pizzas. So this is an example of comparative advantage.
question
Which of the following is an example of absolute advantage??
A.
Amy is smart and performs well in exams.
B.
Charlie enjoys skiing while Ryan enjoys hiking.
C.
Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same task.
D.
Nick has an advantage over others in the industry because he knows many software programs.
answer
C
Absolute advantage is when one person? (or nation) is more productive than another? - needs fewer inputs or takes less time to perform a good or a production task.
Tom does his math homework in 2 hours while Harry takes only 30 minutes to do the same? task, implies that Harry is more productive than Tom as he takes less time to perform a production task. So the statement is an example of absolute advantage.
question
Big Lobster sells lobster and? fish, and so too does H Salt.
If Big Lobster?'s opportunity cost of preparing lobster exceeds H Salt?'s opportunity cost of preparing? lobster, then? ______.
A.
H Salt does not have a comparative advantage in preparing lobster
B.
H Salt has a comparative advantage in preparing lobster
C.
Big Lobster has a comparative advantage in preparing lobster
D.
they will both gain if Big Lobster sells lobster and H Salt sells fish
answer
B.
H Salt has a comparative advantage in preparing lobster
question
If H Salt and Big Lobster decide to specialize and? trade, then the source of the gains from the trade between H Salt and Big Lobster is? _______.
A.
the elimination of absolute advantage
B.
the elimination of comparative advantage
C.
divergent opportunity cost
D.
equal opportunity cost
answer
C
H Salt and Big Lobster both gain from trade if one firm has a lower opportunity cost in preparing lobster and the other firm has a lower opportunity cost in preparing fish.
Each firm sells the good in which it has the lower opportunity cost and buys the good in which it has the higher opportunity cost.
In this? way, production increases with no change in resources.
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