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Econ 1000 Quiz 2 UPDATED Exam Questions and CORRECT Answers
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Econ 1000 Quiz 2 UPDATED Exam Questions and CORRECT Answers Three Fundamental Economic Questions - CORRECT ANSWER- 1. What to produce? 2. How to produce? 3. For whom to produce? Goods and Services - CORRECT ANSWER- Outputs of the production process, such as food, clothing, shelter, healthca...

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  • September 15, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • econ 1000 quiz 2
  • econ 1000
  • econ

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  • ECON 1000
  • ECON 1000

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Econ 1000 Quiz 2 UPDATED Exam
Questions and CORRECT Answers
Three Fundamental Economic Questions - CORRECT ANSWER- ✔✔1. What to produce?
2. How to produce?
3. For whom to produce?


Goods and Services - CORRECT ANSWER- ✔✔Outputs of the production process, such as
food, clothing, shelter, healthcare, education, and entertainment


Factors of Production - CORRECT ANSWER- ✔✔Inputs in the production process, broadly
categorized as land, labor, and capital


Production - CORRECT ANSWER- ✔✔The process by which inputs are transformed into an
output


Households - CORRECT ANSWER- ✔✔Primary role is to obtain benefits from consuming
goods and services
- Primary suppliers of labor


Firms - CORRECT ANSWER- ✔✔Primary role is to produce goods and services for
consumption by households
- Create finished goods


Production decision - CORRECT ANSWER- ✔✔What to produce?



Resource use decision - CORRECT ANSWER- ✔✔How to produce it?



Distributional decision - CORRECT ANSWER- ✔✔For whom to produce it?

, Production Possibilities Frontier (PPF) - CORRECT ANSWER- ✔✔A graphic curve used to
describe the maximum output limits on two products that compete for the same finite
resources.


Attainable output combination - CORRECT ANSWER- ✔✔Combinations which can be
produced with the help of given resources and technology
(Could be below or on PPF)


Unattainable output combination - CORRECT ANSWER- ✔✔Combinations which can NOT
be produced with the help of given resources and technology


Productive efficiency - CORRECT ANSWER- ✔✔Producing the largest possible output from
the available resources in an economy without sacrificing production of another good.


- Combination of goods fall inside the PPF -> EFFICIENT


Productive inefficiency - CORRECT ANSWER- ✔✔It is possible to INCREASE the amount
produced of some good, without sacrificing production of another good.


- Combination of goods fall below the PPF -> INEFFICIENT


Absolute advantage - CORRECT ANSWER- ✔✔The ability to produce more output than
another producer using the same amount of inputs.


Opportunity cost - CORRECT ANSWER- ✔✔Benefits that are lost when choosing one
option over another


Comparative advantage - CORRECT ANSWER- ✔✔The ability to produce a particular good
or service at a lower opportunity cost than its trading partners


Law of Comparative Advantage - CORRECT ANSWER- ✔✔This law states that when
increasing the production of a good, a society should do so by using the available productive
resource with the lowest opportunity cost

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