MICRO Unit 1

Front

Scarcity is best defined as: the difference between unlimited wants and limited economic resources.

Back

the difference between unlimited wants and limited economic resources.

Front

Which of the following statements describes an economy confronting scarcity? If more of one good is produced, less of another good must be produced., An economy can produce a limitless amount of all goods., All individuals are able to satisfy their consumption desires., Scarcity is eliminated by government provision of goods., Scarcity only exists as a problem when there is more than one good to produce.

Back

If more of one good is produced, less of another good must be produced.

Front

Countries that have a _________ advantage can specialize in the production of goods and trade with other countries at a _____ opportunity cost than if they produce everything on their own

Back

comparative; lower

Front

As more of good X is produced in an economy using all its available resources efficiently to produce only two goods, what happens to the production of good Y?

Back

Less of good Y is produced as resources move from producing good Y to producing good X.

Front

Susan and John both sew t-shirts in a small factory. Using the same resources, John can sew twelve t-shirts and Susan can sew nine t-shirts in one day. Which of the following can be concluded from the given information?

Back

John has an absolute advantage in sewing t-shirts.

Front

As a factor of production, capital refers to the

Back

tools and machinery used to produce goods and services

Front

In contrast to a market economy, a command economy relies on which of the following?
The private sector in deciding what goods will be produced,
Private ownership of resources,
Profits as incentives to make choices,
Supply and demand to determine prices,
The government to allocate resources

Back

The government to allocate resources

Front

A linear production possibilities curve indicates which of the following? Constant opportunity costs, Decreasing opportunity costs, Increasing opportunity costs, Diminishing marginal returns, Labor-intensive production

Back

Constant opportunity costs

Front

Using the same amount of time and resources, Jack can assemble either 10 bikes or 5 computers, whereas Sam can assemble either 5 bikes or 5 computers. Based on the data, which of the following statements is correct?

Back

Jack has a comparative advantage in assembling bikes.

Front

According to the graph above, if a country is currently producing at point X, the opportunity cost of producing another consumer good is

Back

20 capital goods