ECON 2110 - Clemson: Exam 1 UPDATED Actual Questions and CORRECT Answers
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Course
ECON 2110
Institution
ECON 2110
ECON 2110 - Clemson: Exam 1 UPDATED
Actual Questions and 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 anothe...
ECON 2110 - Clemson: Exam 1 UPDATED
Actual Questions and 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
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.
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