Quiz 3

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Chapter 2: Scarcity and the World of Trade-Offs

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Quiz 3

Quiz 3

This activity contains 10 questions.

Everyone must make choices because of

bads.scarcity.needs.shortages.

Economic goods are

goods that are scarce.always tangible goods.defined as all goods and services.unrelated to human wants.

Which of the following statements about the production possibilities curves is not true?

A production possibilities curve illustrates the concept of scarcity.A linear production possibility curve illustrates the concept of increasing relative cost.A linear production possibilities curve illustrates the concept of efficiency.A production possibilities curve illustrates the concept of opportunity cost.

The more specialized resources are in the economy,

the closer to the origin lies the production possibilities curve.the more bowed the production possibilities curve.the lower the opportunity costs of shifting production from one good to another.the closer to one axis society will choose to operate.

Which of the following point represents an efficient production combination?

Point CPoint EPoint BWe cannot tell without further information.

Assume the economy is presently operating at Point D. Society would like to move to point C. To achieve this the economy must:

consume more goods and services.move towards point E first.move towards point B first.move further down the production possibilities curve to point F first.

In order to take advantage of the gains from specialization nations will

produce goods that they have a comparative advantage in.produce goods that use the resources that are not subject to scarcity in their nation.produce all goods that they have an absolute advantage in.produce to the right of the production possibilities curve.

The division of labor is illustrated in all of the following cases except

a family.college teaching.a Picasso painting.an assembly line.

Which of the following statements is true?

Specialization affects interstate trade but not international trade.Everyone can benefit when people specialize where they have a comparative advantage and then trade with each other.Specialization affects international trade but not interstate trade.Comparative advantage applies to nations but not to people.

Jenny goes to a cooking academy to become a chef. This is an example of

an increase in labor.an investment in human capital.an investment in physical capital.entrepreneurship.

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