Econ 101 Umich Exam 2 Caldwell Questions
and Answers 100% Pass
comparative advantage - Answer--when one producer can produce a good at a lower
opportunity cost than another producer
-reason for specialization
absolute advantage - Answer--when one producer can produce more of a good than
another producer in a certain period of time
Production Possibility Frontier - Answer--represents the possible combinations of goods
that an economy can produce in a certain period of time
specilaization - Answer--requires sufficient ability to produce according to demand (must
lies on or within PPF)
transportation costs also must be low enough
must be possible to exchange products and large enough market to consumer
efficiency - Answer--no way to produce more of one good without producing less of
another good
opportunity cost - Answer--slope of the PPF- increasing if bowed outward because as
more is produced, less suitable resources are used
economic growth - Answer--growth ability of economy to produce goods and services;
an outward shift from the PPF sue to increases in factors of production and changes in
technology
sources of comparative advantage - Answer--1. difference in climate
2. difference in factor endowments
and Answers 100% Pass
comparative advantage - Answer--when one producer can produce a good at a lower
opportunity cost than another producer
-reason for specialization
absolute advantage - Answer--when one producer can produce more of a good than
another producer in a certain period of time
Production Possibility Frontier - Answer--represents the possible combinations of goods
that an economy can produce in a certain period of time
specilaization - Answer--requires sufficient ability to produce according to demand (must
lies on or within PPF)
transportation costs also must be low enough
must be possible to exchange products and large enough market to consumer
efficiency - Answer--no way to produce more of one good without producing less of
another good
opportunity cost - Answer--slope of the PPF- increasing if bowed outward because as
more is produced, less suitable resources are used
economic growth - Answer--growth ability of economy to produce goods and services;
an outward shift from the PPF sue to increases in factors of production and changes in
technology
sources of comparative advantage - Answer--1. difference in climate
2. difference in factor endowments
