Modules 1,2,3,4 (quiz)

question

Scarcity in economics means:
answer

There are not sufficient resources to produce all the goods and services wanted.
question

A high-school graduate who gets a college degree is adding to the economy’s stock of:
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Human capital.
question

The problem of determining what goods and services society should produce:
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Exists because there are not enough resources to provide all all of the goods and services that people want to purchase.
question

Which option can best be considered the resources used in the production of computers?
answer

Computer engineers.
question

The opportunity cost of something is:
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What is given up to acquire it.
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A simplified representation that is used to study a real situation is called:
answer

A model.
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The assumption that all factors remain constant except for the variables being studied is called:
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Ceteris paribus.
question

Jim being paid $7.25 an hour to work at a restaurant is an example in the circular flow of a:
answer

Household selling a resource in the factor market.
question

A local grocery store benefits when a new furniture factory moves to town and hires workers because:
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The new jobs at the new factory will increase local incomes, some of which will be spent at the local grocery store.
question

A firm is an organization that produces goods and services.
answer

True.
question

The production possibility frontier illustrates that:
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If all resources of an economy are being use efficiently, more of one good can be produced only if less of another good is produced.
question

All points inside the production possibility frontier represent:
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Inefficient production points.
question

Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods:
answer

Must decrease.
question

If an economy is producing a level of output that is on its production possibility frontier, the economy has:
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No idle resources and is using resources efficiently.
question

Economists usually make the assumption that production is subject to increasing opportunity costs because:
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Not all resources are equally suited to producing every good.
question

Who wrote The Wealth of Nations, a book that many credit with establishing economics as a discipline?
answer

Adam Smith
question

Increases in total output realized when individuals specialize in particular tasks and trade are known as:
answer

The gains from trade.
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Because of trade, a country may:
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Avoid opportunity costs.
question

An economy is said to have a comparative advantage in the production of a good if it can produce that good:
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At a lower opportunity cost than another economy.
question

If they spend all night writing computer programs, Laurence can write 10 programs whereas Carrie Anne can write 5. If they spend all night making sunglasses, Laurence can make 6 whereas Carrie Anne can make 4. Given this information and supposing Laurence and Carrie Anne have constant opportunity costs, which statement is correct?
answer

Laurence has an absolute advantage in both programs and sunglasses.

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