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Microeconomic3 Question and answers already passed 2024

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Microeconomic3 Question and answers already passed 2024 Microeconomics - Exam 1 (University of Iowa) Production Possibility Frontier (PPF) - correct answer a graph that shows the combinations of output that the economy can possibly produce given the available factors of production Conclusi...

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  • August 30, 2024
  • 11
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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Microeconomics - Exam 1 (University of
Iowa)
Production Possibility Frontier (PPF) - correct answer ✔a graph that shows
the combinations of output that the economy can possibly produce given the
available factors of production


Conclusions of PPF - correct answer ✔1) Scarcity
2) Choice
3) Opportunity Cost of Making a Choice
4) Increasing Opportunity Cost


Opportunity cost - correct answer ✔What a person sacrifices when they
choose one option over another.


Absolute advantage - correct answer ✔the ability to produce a good more
efficiently than another producer (higher production)


Comparative advantage - correct answer ✔when one producer is able to
produce a good at a lower opportunity cost than another producer


The gains of trade are based on ______________ - correct answer
✔comparative advantage, not absolute advantage


A 1:1
B 1:10
Terms of Trade were 1:5 would be equally good for both
1:3 would be more beneficial for Person B

, 1:8 would be more beneficial for Person A - correct answer ✔Terms of Trade
were 1:5 would be equally good for both
1:3 would be more beneficial for Person B
1:8 would be more beneficial for Person A


One can have an absolute advantage in both goods but not a comparative
advantage in both - correct answer ✔


Specialize in good they have comparative advantage in - correct answer ✔


Without trade - correct answer ✔production = consumption


With trade; - correct answer ✔production and consumption no longer have to
be equal


imports - correct answer ✔goods produced abroad and sold domestically


exports - correct answer ✔goods produced domestically and sold abroad


terms of trade have to be in between the opportunity costs otherwise it is not
beneficial - correct answer ✔


Demand - correct answer ✔"Consumer Behavior"


Law of Demand - correct answer ✔at higher prices, people buy more; at
lower prices, people buy less

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