What do economists often use?

Models

Can a PPF tell you what's best?

No, what's possible

What does the slope of the PPF represent?

Opportunity cost

What are the two types of PPF's?

Linear & Curved

Any point outside the PPF is considered:a. Efficient b. Inefficientc. Unattainable d. None of these answers are correct

C

Comparative advantage refers to: a. Having the lower opportunity cost of productionb. Having a larger productive capability c. Having a constant opportunity cost d. Having an increasing opportunity cost

A

Consider a PPF with a slope of -1/2. The opportunity cost of one unit of the x variable is: a. 2 units of yb. 1/2 of a unit yc. 1 unit of yd. Cannot be determined by the information given

B

The law of comparative advantage says that each party should specialize in what it has the _________ advantage in & trade.a. Comparative b. Absolutec. Relative d. Economic

A

Which of the following is false? a. PPF's can be linear or curvedb. As one gets more resources , a PPF could shift cut to the rightc. The PPF can tell you where the best point of production is d. The PPF represents the tradeoff of producing more of one good at the expense of producing less of another

C

Economics is primarily the study of: a. Financial institutions, like banks and the stock market b. How society coordinates its unlimited wants with its finite ability to satisfy those wants c. How international trade affects currency values d. None of the above

B

Microeconomics focuses more on: a. The study of decisions at the individual firm or household levelb. The study of the economy in aggregate c. The study of financial institutions d. The study of international trade and exchange rates

A

Sunk costs are:a. The total cost to do an action b. The marginal cost to do an action c. A cost that has been incurred and is irrecoverable d. A cost that will not increase as the firm's output increases, like rent on the firm's building

C

Generally, we think individuals try to maximize their ______ and firms try to maximize their _____.a. income, profitsb. income, revenuec. utility, profitsd. utility, revenue

C

Opportunity cost" refers to: a. The highest value alternative given up to undertake an actionb. The sum of all alternative actionsc. The incremental additional cost of undertaking an actiond. The unrecoverable costs associated with undertaking an action

A