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1. What important concept is illustrated with the Production Possibilities Frontier (PPF)? Limited resourcesOpportunity costComparative AdvantageAll of the above2. Tastes affect prices, because _____ changes in taste lead to changes in demand.people with superior taste are role models for individuals who have inferior taste.marginal utility increases as more individuals embrace new fashions.taste is subjective and cannot be compared between any two individuals.3. The law of supply asserts that _____ (Points : 10)market prices often are unfair, and government must set limits on how much sellers can charge for necessities.human wants are insatiable.there is a negative relationship between the amount of anything that people will purchase and the quantity that sellers will bring to market.there is a positive relationship between the price of a good or service and the quantity that sellers will bring to market.4. When doing research, Economists _______Follow the scientific method: observation, theory, and more observationCannot use experiments, as they are often done in areas like Physics and Chemistry.Have to use whatever data the world happens to give themAll of the above5. Economics studies ______ How society manages its scarce resourcesSocial welfareEthical use of resourcesProtection of workers’ rights6. Everything else held constant, when the price of a product increases _______ The quantity demanded decreasesThe quantity demanded increasesThe quantity supplied decreasesThe quantity supplied stays the same7. When the demand of a product increases ______ The equilibrium price and quantity will decreaseThe equilibrium price and quantity will increaseThe equilibrium price will increase and the equilibrium quantity will decreaseThe equilibrium price will decrease and the equilibrium quantity will increase8. In free and competitive markets, shortages always lead to _______ Lower pricesHigher pricesNo change in pricesAny of the above9. In the short run, how are inflation and unemployment related? they are unrelatedwhen inflation rises, unemployment rises toowhen unemployment declines, inflation increases.when inflation falls, unemployment falls10. The principle of comparative advantage states that individuals, firms, and national economies should produce _____ what they are able to produce most efficiently.only those things that they can produce more efficiently than anyone else.whatever they want for their own consumption.enough necessities to ensure self-sufficiency.