Econ 1014 Exam 3 Study Guide - Unit 4 Section 1 Developing...

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Microeconomics: A Contemporary Introduction
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Chapter 19 / Exercise 10
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Unit 4 Section 1: Developing the Production Possibilities Model 1) Which of the following is NOT illustrated by the production possibilities curve (PPC)? a) Efficiency b) Opportunity cost c) Equity d) All of the above illustrated by the PPC e) None of the above illustrated by the PPC
2) Which of the following could be the cause of a country producing “inside its Production Possibilities Curve?” 3) If a country is said to be “producing on its production possibilities curve”:
4) When an economy is operating on its production possibilities curve, it must sacrifice some production of
one good if it wants to produce more of another good because: Unit 4 Section 2: Using PPF to Examine Economic Growth and Decline
1) One explanation for the high rate of economic growth experienced by some countries may be that: a) Those countries choose to sacrifice current consumption of goods, such as TVs, cars, and video games, in order to use more of their scarce resources to produce goods, such as education, factories and machinery, which allow them to become more productive in the future b) Those countries cut back on current production in order to save their scarce resources for later years, allowing them to produce more in the future c) Those countries remain self-sufficient by cutting themselves off from trade with the rest of the world, allowing them to become experts at the production of all kinds of goods, which makes them more productive in the future d) All of the above are possible explanations e) None of the above us a possible explanation
Unit 4 Section 3: Specialization and Trade 1) If an economist says that a country has a comparative advantage in the production of a good, he/she is saying that:
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Microeconomics: A Contemporary Introduction
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Chapter 19 / Exercise 10
Microeconomics: A Contemporary Introduction
McEachern
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