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Econ_002_Final_Exam_1_

Econ_002_Final_Exam_1_ - Econ 002 Final Exam SU07 Student 1...

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Econ 002 Final Exam SU07 Student: ___________________________________________________________________________ 1. The central concern of economics is A. poverty. B. wealth accumulation. C. the conflict between capitalism and socialism. D. scarcity. E. overconsumption 2. The cost-benefit principle indicates that an action should be taken 3. The opportunity cost of an activity is the value of 4. Economic surplus is 1
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5. Economists use models to A. create situations that cannot be directly observed. B. describe each individual's choice behavior C. illustrate general patterns of behavior. D. avoid having to make assumptions. E. prove that the cost-benefit principle is correct. 6. The cost that we can not avoid whether or not an action is taken, is called 7. If a nation has the lowest opportunity cost of producing a good, that nation has a(n) 8. If a given production combination is efficient, then it must be 9. Large developed countries can produce more of practically everything than can a small less developed country. Therefore, A. the large country has no incentive to trade with the smaller country. B. it would be impossible for the smaller country to have a comparative advantage in making any products that the larger country wants to buy. C. trade between the countries is more likely to benefit the large country and harm the smaller country. D. trade between the countries is more likely to benefit the small country and harm the larger country. E. trade will benefit both countries if each country has a comparative advantage in a traded product.
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