Quiz 1 Part 2

Question 1

Define Full Employment

Answer 1

All available resources are used

Question 2

Define Full Production or Economic Efficiency

Answer 2

Employed resources are providing maximum satisfaction of our economic wants. “Producing the right goods(allocative efficiency) in the right way(productive efficiency)

Question 3

Define Allocative Efficiency

Answer 3

Resources used to produce the combination of goods and services wanted by society. Ex: computers vs. typewriters

Question 4

Define Productive Efficiency

Answer 4

Least costly production techniques are used to produce wanted goods and services

Question 5

Product Possibilities Frontier

Answer 5

1. The economy is operating efficiently 2. Fixed Resources 3. Fixed Technology 4. Two Goods

Question 6

Law of Increasing Opportunity Costs

Answer 6

As the production of a particular good increases, the opportunity costs of producing an additional unit rises because resources are specialized.

Question 7

Define Attainable

Answer 7

any combination of goods that can be produced using currently available resources(on or inside the line)

Question 8

Define Unattainable

Answer 8

any combination of goods that cannot be produced using currently available resources(outside the line)

Question 9

Define Inefficient

Answer 9

any combination of goods for which you can produce more of one good without having to give up some of the other(inside the line)

Question 10

Define Efficient or Technical Efficiency

Answer 10

Achieved when more of one good cannot be produced without producing less of the other good(on the line)

Question 11

Define Absolute Advantage

Answer 11

An Individual, firm, industry, or country has an absolute advantage over another if it takes fewer hours to perform a task than another.

Question 12

Define Comparative Advantage

Answer 12

The ability to produce a good and/or service at a lower opportunity cost than another person or country.