Which of the following is not scarce according to the economic definition?
answer
none of the above
question
What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy?
answer
The country is operating on its production possibilities frontier.
question
Refer to the graph to the right. What is the opportunity cost of moving from point B to point C?
answer
20 sudans
question
Which of the following events would create economic growth, that is, shift the production possibilities frontier outward?
answer
all of the above
question
What is absolute advantage?
answer
The ability to produce more of a good or service than competitors using the same amount of resources.
question
What is comparative advantage?
answer
the ability to produce a good or service at a lower opportunity cost than other producers
question
Is it possible for a country to have a comparative advantage in producing a good without also having an absolute advantage? A country without an absolute advantage in producing a good
answer
will have a comparative advantage if it has a lower opportunity cost of producing that good.
question
Who has the comparative advantage in producing oil?
answer
Neither country has a comparative advantage producing oil because their opportunity costs of producing oil are equal.
question
Can these two countries gain from trading oil and fish oil?
answer
These countries cannot gain from trade because neither has a comparative advantage producing either good.
question
Whether carried out by an individual or a country, production beyond the production possibilities frontier
answer
not physically possible
question
With respect to consumption, individuals and countries
answer
can, through trade, consume beyond their production possibilities frontiers
question
During the 1928 presidential election campaign, Herbert Hoover, the Republican candidate, argued that the United States should only import those products that could not be produced here. Do you believe that this would be a good policy? Explain.
answer
This is not a good policy because it does not necessarily result in countries producing those goods for which they have a comparative advantage.
question
The chapter mentions that in 1965 married women with children worked an average of 32 hours per week while men worked an average of only 4 hours on houseworklong dasha total of 36 hours of housework. In 2016, the estimated average weekly hours of housework for women declined to 15.7, while the hours worked by men increased to about 9.7long dasha total of 25.4 hours of housework.
Source: U.S. Bureau of Labor Statistics, "American Time Uselong dash2016," June 27, 2017.
Does the decrease in the total number of hours of houseworklong dashfrom 36 to 25.4long dashmean that families are willing to live in messier homes?
answer
No, because there are more labor saving devices so less time is required.
question
Absolute advantage is the ability of an individual, a firm, or a country to
answer
produce a good or service at a lower opportunity cost than other producers.pr
question
If a country has a comparative advantage in the production of a good, then that country
answer
has a lower opportunity cost in the production of that good.
question
What is the basis for trade?
answer
comparative advantage
question
How can a country gain from specialization and trade?
answer
Specialize in comparative advantage trade for other goods and services
question
What are the two main categories of participants in markets?
answer
Firms and households.
question
Which participants are of greatest importance in determining what goods and services are produced?
answer
households
question
What is a free market?
answer
A free market is one where the government does not control the production of goods and services.
question
In what ways does a free market economy differ from a centrally planned economy? Unlike a free market economy,
answer
centrally planned economies have extensive government controls.
question
What incentives does a market system provide to encourage self-interest?
answer
financial reward
question
The British historian Thomas Macaulay once remarked that copyrights are "a tax on readers."
Copyrights are a 'tax' on readers in the sense that
answer
copyrights limit of the supply of related creative work which results in higher prices.
question
If copyrights are a 'tax' on readers, governments provide a legal framework to enforce them because
answer
copyrights provide needed protection for authors and creators of movies or other artistic works.
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A(n) --- is someone who operates a business, bringing together the factors of productionlong dashlabor, capital, and natural resourceslong dashto produce goods and services.
answer
Entrepreneur
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In economic terminology, the inputs used to produce output are referred to as
answer
factors of production
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The Scottish philosopher Adam Smith argued in 1776 that
answer
prices would do a better job of coordinating the activities of buyers and sellers than guilds could.
question
Property rights are
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the rights individuals or firms have to the exclusive use of theirth property, including the right to buy or sell it.
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In a free market, the actions people take are largely determined by
answer
the motivation of financial reward.th
question
The government seeks to protect intellectual property rights by granting
answer
patents and copyrights
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