Elements of Economics

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

What is opportunity cost?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

Labor, human capital, entrepreneurship, natural resources, and capital are all examples of which of the following?

• Outputs
• Substitutes in Production
• Absolute Advantage
• Factors of Production

Land includes...

• The "gifts of nature" or natural resources not created by human effort.

• the tools, equipment, and factories used in production of goods and services

• people with all their efforts and abilities

• individuals who start a new business or bring a product to market.

A bulldozer is an example of...

• Land
• Labor
• Entrepreneurs
• Capital

A product or service is scarce when

• The amount available is not enough to meet the demands of society

• The amount available can satisfy the demands of society

• Its price far exceeds the value of the item.

• One company is responsible for producing the product.

What is the difference between Normative and Positive Statements? Select all that apply

• One can be tested

• One is normal and the other is not

• One is positive and one is negative

• One is an opinion

A point inside the PPF curve is ______.

• Efficient

• Inefficient

• Perfect

• Unattainable

Which country has an absolute advantage in producing wheat?

• India

• China

Columbia and Mexico both produce wine and cars under conditions of constant opportunity costs. Columbia will have a comparative advantage in car production if:

• it can produce more cars than Mexico

• its labor productivity in car production is greater than Mexico's

• the opportunity cost is lower in Columbia than in Mexico.

• it can produce more wine than Mexico