Which of the following makes trade-offs necessary? (2 points)

Diminishing marginal returns

Diminishing marginal utility

Limited resources and unlimited wants and needs

Different opportunity costs

An excess of supply

Points

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Incorrect

2.

(01.01 MC)

Which of the following statements about the factors of production is accurate? (2 points)

They are all scarce because of unlimited wants and needs.

They are not subject to the law of diminishing marginal benefit.

They are categorized into consumer, capital, labor, and entrepreneurship.

Most are scarce, except for non-rival factors.

They are acquired in the product market.

Points

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Incorrect

3.

(01.02 MC)

Which of the following questions helps leaders of business firms determine resource allocation? (2 points)

Who consumes the goods?

Which people most need the goods or services?

Is the opportunity cost of resources constant or increasing?

How much money do people have to pay for the goods or services?

Are the resources used to produce the goods scarce?

Which of the following economic models is designed to illustrate trade-offs and production that is efficient, is impossible, or fails to use all available resources? (2 points)

Circular flow diagram

Supply curve

Demand curve

Marginal cost curve

Production possibility curve

0.

(01.04 MC)

Country A can produce more apples than any other country when given the same quantity of factors of production. As a result, Country A must have (2 points)

an absolute advantage in apple production

a comparative advantage in apple production

superior weather, which results in higher apple production

an increasing opportunity cost associated with apple production

more factors of production devoted to apple production than any other country

Assume Country Q and Country P can produce only two goods: gadgets and widgets. Country Q has an absolute advantage in widgets and a comparative advantage in gadgets. Assume each country has constant opportunity costs of production. Country P must have (2 points)

an absolute advantage in gadgets

a comparative advantage in widgets

an absolute and comparative advantage in widgets

an absolute and comparative advantage in gadgets

no absolute advantage in either good, but a comparative advantage in widgets

Which of the following describes a situation in which total costs and benefits are the only viable evaluation to inform a decision? (2 points)

Some resource costs are unknown.

A good or service cannot be subdivided into increments or additional units.

The opportunity cost is unquantifiable.

There are no implicit benefits.

An accountant identifies steep explicit costs.

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A consumer purchases a vehicle that gets very few miles per gallon and realizes that a significant portion of his income is going to gasoline. Which of the following statements accurately represents marginal analysis? (2 points)

The consumer should ignore the cost of purchasing the vehicle because the money has already been spent.

The consumer should consider getting adequate benefit for the purchase price of the vehicle.

The consumer should evaluate whether it was wise to buy the vehicle.

The consumer should lower his weekly driving miles until the marginal cost is less than the marginal benefit.

The consumer should give car rides to his neighbors until the marginal benefit of owning the car is greater than the marginal cost.