Macro Chapter 2

Which term describes the ability of a country to produce more of a good with the same resources than another country?

• Comparative advantage

• Absolute advantage

• Outsourcing

• Efficient point

What does a point inside the production possibilities curve represent?

• Efficient use of resources

• Inefficient use of resources

• Unattainable production

• Comparative advantage

Which term refers to the process of obtaining goods or services from an external or foreign supplier?

• Outsourcing

• Absolute advantage

• Attainable point

• Efficient point

A point outside the production possibilities curve is best described as:

• Attainable point

• Efficient point

• Unattainable point

• Inefficient point

Which concept explains why countries benefit from specializing in the production of goods for which they have the lowest opportunity cost?

• Absolute advantage

• Comparative advantage

• Outsourcing

• Efficient point

If a country is producing at a point on its production possibilities curve, what does this indicate?

• Resources are being used inefficiently

• Production is unattainable

• Resources are being used efficiently

• The country is outsourcing production

Which of the following best describes an attainable point on a production possibilities curve?

• Any point outside the curve

• Any point on or inside the curve

• Only the midpoint of the curve

• Only the endpoints of the curve

A country can produce either 10 cars or 20 computers with its resources. If it chooses to produce 5 cars, what is the opportunity cost in terms of computers?

• 5 computers

• 10 computers

• 15 computers

• 20 computers

If Country A can produce both wheat and cloth more efficiently than Country B, but Country B has a lower opportunity cost for producing cloth, which country should specialize in cloth?

• Country A

• Country B

• Both countries

• Neither country

Suppose a nation is operating at an inefficient point on its production possibilities curve. What could it do to move to an efficient point?

• Increase unemployment

• Use resources more effectively

• Reduce technology

• Decrease production