Post Ch2 Micro Questions and Answers 100% Correct

Post Ch2 Micro Questions and Answers 100% Correct Post Ch2 Micro Questions and Answers 100% Correct Post Ch2 Micro Questions and Answers 100% Correct Post Ch2 Micro Questions and Answers 100% Correct Post Ch2 Micro Questions and Answers 100% Correct Post Ch2 Micro Questions and Answers 100% Correct A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are efficiently utilized. An economy that operates inside this production possibilities curve a. is using its resources inefficiently. b. is utilizing its available resources as efficiently as possible. c. lacks the resources to produce goods efficiently. d. lacks the necessary technology to produce efficiently. - ANSWER-a. is using its resources inefficiently. For most students attending state universities, the largest cost component of going to college is a. tuition. b. the cost of books and supplies. c. the opportunity cost in terms of forgone current income from the time spent attending college. d. the cost of room and board. - ANSWER-c. the opportunity cost in terms of forgone current income from the time spent attending college. The law of comparative advantage explains which of the following? a. An increase in the price of a good will lead to an expansion in the quantity supplied by business firms. b. There will be an inverse relationship between the price of a product and the quantity of it that will be demanded. c. Specialization and exchange will make it possible for trading partners to expand their combined output. d. Larger firms will have lower per unit costs than smaller firms. - ANSWER-c. Specialization and exchange will make it possible for trading partners to expand their combined output. Which of the following most accurately states the economic significance of exchange? a. Exchange creates value by moving goods from parties who value them less to parties who value them more. b. Production of physical goods creates value; exchange merely redistributes this value. c. Exchange reduces value since it consumes resources without adding to the physical supply of goods.