Chapter 2

Question 1

The ability to produce the same good using fewer inputs than another producer is…

Answer 1

Absolute Advantage

Question 2

Producing goods at the lowest opportunity cost compared to another producer is…

Answer 2

Comparative Advantage

Question 3

The ______ of a good is the amount of the other good given up.

Answer 3

Opportunity Cost

Question 4

Shows all the combinations of goods that a country can produce given its productivity and supply of inputs.

Answer 4

PPF (Productions Possibilities Frontier)

Question 5

The slope of the ppf is the opportunity cost of the slope in the ______

Answer 5

x axis

Question 6

The country by itself cannot get outside the ppf, however, ______ can cause the country to move outside the ppf.

Answer 6

Trade