Economic Concepts Quiz

Self-sufficiency is the best way to increase one's material welfare.

• True

• False

Comparative advantage is a comparison based on opportunity cost.

• True

• False

If a producer is self-sufficient, the production possibilities frontier is also the consumption possibilities frontier.

• True

• False

If a country's workers can produce 5 hamburgers per hour or 10 bags of French fries per hour, absent trade, the price of 1 bag of fries is 2 hamburgers.

• True

• False

If producers have different opportunity costs of production, trade will allow them to consume outside their production possibilities frontiers.

• True

• False

If trade benefits one country, its trading partner must be worse off due to trade.

• True

• False

Talented people that are the best at everything have a comparative advantage in the production of everything.

• True

• False

A perfectly competitive market consists of products that are all slightly different from one another.

• True

• False

An oligopolistic market has only a few sellers.

• True

• False

The law of demand states that an increase in the price of a good decreases the demand for that good.

• True

• False