Economic Unit 2 Retest

What is the definition of absolute advantage?

• The ability to produce more of a good or service than competitors using the same amount of resources.

• The ability to produce a good or service at a lower opportunity cost than competitors.

• The ability to produce a good or service with fewer resources than competitors.

• The ability to produce a good or service with higher quality than competitors.

What is the definition of comparative advantage?

• The ability to produce more of a good or service than competitors using the same amount of resources.

• The ability to produce a good or service at a lower opportunity cost than competitors.

• The ability to produce a good or service with fewer resources than competitors.

• The ability to produce a good or service with higher quality than competitors.

What does the law of demand say?

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded decreases.

• As the price of a good increases, the quantity demanded decreases.

• The price of a good does not affect the quantity demanded.

What does the law of supply say?

• As price increases, quantity supplied decreases.

• As price decreases, quantity supplied increases.

• As price increases, quantity supplied increases.

• Price and quantity supplied are unrelated.

Define price.

• The amount of money required to purchase a good or service.

• The quantity of goods available for sale.

• The demand for a product in the market.

• The cost of producing a good or service.

What is market equilibrium?

• When supply exceeds demand.

• When demand exceeds supply.

• When supply equals demand.

• When price is at its highest point.

What is free trade?

• Trade without restrictions

• Trade with high tariffs

• Trade with quotas

• Trade with embargoes

What are some examples of trade barriers?

• Tariffs and quotas

• Free trade agreements

• Open markets

• Trade unions

Define appreciation in economic terms.

• Increase in the value of a currency

• Decrease in the value of a currency

• Stability in the value of a currency

• Fluctuation in the value of a currency

Define depreciation in economic terms.

• Decrease in the value of a currency

• Increase in the value of a currency

• Stability in the value of a currency

• Fluctuation in the value of a currency