ECON 2110 - Clemson: Exam 1 Questions with Correct Answers| 2024/2025 Update| Grade A+

ECON 2110 - Clemson: Exam 1 Questions with Correct Answers| 2024/2025 Update| Grade A+ Absolute Advantage The ability to produce a good using fewer inputs than another producer. Comparative Advantage The ability to produce a good at a lower opportunity cost than another producer. Possible It is ( possible/impossible ) for a country to have an absolute advantage in both goods. Impossible It is ( possible/impossible ) for a country to have a comparative advantage in both goods. The inverse of the first good If you have the opportunity cost of one good, how can you find the opportunity cost of the other? Trade Off The idea of having to sacrifice something for something else because of limits. Comparative Advantage In order to have a higher overall production, a country should specialize in the good that it has a(n) (absolute/comparative) advantage in. Trade What makes everyone better off? Production Possibilities Curve/Frontier shows maximum amount of any two products that can be produced from a fixed set of resources, and the possible trade-offs in production between them. Private Property Rights 1. The right to exclusive use 2. Legal Protection 3. The right to transfer, sell, exchange, or mortgage. Creative Destruction through entrepreneurial discovery and innovation, new products and methods of production are continuously replacing old one. Point A, B, and C: Possible and Efficient Point D: Possible but Inefficient Point E: Not Possible (unless technology gets better) Points A, B, and C are considered: Point D is considered: Point E is considered: