ECO 111- test 1 questions well
answered graded A+
opportunity cost - correct answer ✔✔the highest valued alternative that must be sacrificed in
order to get something else, best alternative to other things
law of diminishing returns - correct answer ✔✔occurs when each additional unit of input adds
less and less to the output
using the marginal principle to make a decision - correct answer ✔✔marginal benefit- what you
are gaining, marginal cost- what are losing. if... MB is greater than MC you should do it, MC is
greater than MB you shouldnt
how to draw a ppf - correct answer ✔✔model of choices
efficient, inefficient, and impossible on a ppf - correct answer ✔✔efficient if it is on the line,
inefficient if it is below the line, impossible if it is above the line
how to compute oc per unit - correct answer ✔✔oc= loss/gain
factors that will shift ppf - correct answer ✔✔new technology and population growth will make
everything more productive
absolute advantage - correct answer ✔✔when one party has a lower resource cost than
another (higher # on chart)
answered graded A+
opportunity cost - correct answer ✔✔the highest valued alternative that must be sacrificed in
order to get something else, best alternative to other things
law of diminishing returns - correct answer ✔✔occurs when each additional unit of input adds
less and less to the output
using the marginal principle to make a decision - correct answer ✔✔marginal benefit- what you
are gaining, marginal cost- what are losing. if... MB is greater than MC you should do it, MC is
greater than MB you shouldnt
how to draw a ppf - correct answer ✔✔model of choices
efficient, inefficient, and impossible on a ppf - correct answer ✔✔efficient if it is on the line,
inefficient if it is below the line, impossible if it is above the line
how to compute oc per unit - correct answer ✔✔oc= loss/gain
factors that will shift ppf - correct answer ✔✔new technology and population growth will make
everything more productive
absolute advantage - correct answer ✔✔when one party has a lower resource cost than
another (higher # on chart)
