Part III Ch's 1-2 Test Review Peterson Eco/MacArthur

Points inside the curve represent unemployment of resources and inefficiency. True or False

• True

• False

To operate on the PPC Curve, you must fully utilize the 4 Economic Resources, have full production and full-employment, and both productive and allocative efficiencies. True or False

• True

• False

There are three main ways to push out the PPC and grow the economy. 1) Use new and improved technology, 2) have more and better economic resources, and 3) engage in international trade. True or False

• True

• False

A strength of a market economy is that old, sick, and you can compete successfully. True or False

• True

• False

A strength of a command economy is that it can change directions rapidly.

• True

• False

A good that lasts three years or more when used on a regular basis. Examples include tools such as robot welders and tractors.

• Durable

• Non-Durable

The value of the next best alternative given up.

• Marginal Cost

• Opportunity cost

• Specific Cost

An item that lasts for fewer than three years when used on a regular basis. Food, writing paper, and most   clothing items are examples.

• Durable Good

• Consumer Good

• Non-Durable Good

• Capital Good

When factors of production perform only tasks they can do better or more efficiently than others.

• Specialization

• Division of Labor

• Productivity

A way of organizing work so that each worker or work group completes a separate part of the overall task. 

• Division of Labor

• Specialization

• Productivity