ECON 2110 – CLEMSON EXAM 1 QUIZZES WITH
100% CORRECT ANSWERS .
Absolute Advantage - Correct Answer -The ability to produce a good using fewer inputs than
another producer.
Comparative Advantage - Correct Answer -The ability to produce a good at a lower
opportunity cost than another producer.
Possible - Correct Answer -It is ( possible/impossible ) for a country to have an absolute
advantage in both goods.
Impossible - Correct Answer -It is ( possible/impossible ) for a country to have a comparative
advantage in both goods.
The inverse of the first good - Correct Answer -If you have the opportunity cost of one good,
how can you find the opportunity cost of the other?
Trade Off - Correct Answer -The idea of having to sacrifice something for something else
because of limits.
Comparative Advantage - Correct Answer -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 - Correct Answer -What makes everyone better off?
Production Possibilities Curve/Frontier - Correct Answer -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 - Correct Answer -1. The right to exclusive use
1
, 2. Legal Protection
3. The right to transfer, sell, exchange, or mortgage.
Creative Destruction - Correct Answer -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) - Correct Answer -Points A, B, and C
are considered:
Point D is considered:
Point E is considered:
Opportunity Cost - Correct Answer -What must be given up to obtain a different item.
The slope of the PPF - Correct Answer -From the PPF, how can you find the opportunity cost
of one good?
1. Obtaining additional resources.
2. Improvement in technology - Correct Answer -What two ways can shift the PPF outward?
When the opportunity cost of a good rises as more of the good is produced. - Correct Answer
-What can cause the PPF to be bow shaped?
Microeconomics - Correct Answer -The study of how households and firms make decisions
and how they interact in markets.
Macroeconomics - Correct Answer -The study of economy-wide phenomena, including
inflation, unemployment, and economic growth.
Interdependence - Correct Answer -The idea that everyday, we rely on many people that we
will never meet to provide us with the goods and services we enjoy.
2
100% CORRECT ANSWERS .
Absolute Advantage - Correct Answer -The ability to produce a good using fewer inputs than
another producer.
Comparative Advantage - Correct Answer -The ability to produce a good at a lower
opportunity cost than another producer.
Possible - Correct Answer -It is ( possible/impossible ) for a country to have an absolute
advantage in both goods.
Impossible - Correct Answer -It is ( possible/impossible ) for a country to have a comparative
advantage in both goods.
The inverse of the first good - Correct Answer -If you have the opportunity cost of one good,
how can you find the opportunity cost of the other?
Trade Off - Correct Answer -The idea of having to sacrifice something for something else
because of limits.
Comparative Advantage - Correct Answer -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 - Correct Answer -What makes everyone better off?
Production Possibilities Curve/Frontier - Correct Answer -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 - Correct Answer -1. The right to exclusive use
1
, 2. Legal Protection
3. The right to transfer, sell, exchange, or mortgage.
Creative Destruction - Correct Answer -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) - Correct Answer -Points A, B, and C
are considered:
Point D is considered:
Point E is considered:
Opportunity Cost - Correct Answer -What must be given up to obtain a different item.
The slope of the PPF - Correct Answer -From the PPF, how can you find the opportunity cost
of one good?
1. Obtaining additional resources.
2. Improvement in technology - Correct Answer -What two ways can shift the PPF outward?
When the opportunity cost of a good rises as more of the good is produced. - Correct Answer
-What can cause the PPF to be bow shaped?
Microeconomics - Correct Answer -The study of how households and firms make decisions
and how they interact in markets.
Macroeconomics - Correct Answer -The study of economy-wide phenomena, including
inflation, unemployment, and economic growth.
Interdependence - Correct Answer -The idea that everyday, we rely on many people that we
will never meet to provide us with the goods and services we enjoy.
2
