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Ellen, Lawyer
Category: Homework
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Experience:  Lawyer, Accountant and Researcher
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What important concept is illustrated with the PPF?

Customer Question

1. What important concept is illustrated with the Production Possibilities Frontier (PPF)? 
Limited resources
Opportunity cost
Comparative Advantage
All of the above

2. 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 observation
Cannot use experiments, as they are often done in areas like Physics and Chemistry.
Have to use whatever data the world happens to give them
All of the above

5. Economics studies ______ 
How society manages its scarce resources
Social welfare
Ethical use of resources
Protection of workers’ rights

6. Everything else held constant, when the price of a product increases _______ 
The quantity demanded decreases
The quantity demanded increases
The quantity supplied decreases
The quantity supplied stays the same

7. When the demand of a product increases ______ 
The equilibrium price and quantity will decrease
The equilibrium price and quantity will increase
The equilibrium price will increase and the equilibrium quantity will decrease
The equilibrium price will decrease and the equilibrium quantity will increase

8. In free and competitive markets, shortages always lead to _______ 
Lower prices
Higher prices
No change in prices
Any of the above

9. In the short run, how are inflation and unemployment related? 
they are unrelated
when inflation rises, unemployment rises too
when unemployment declines, inflation increases.
when inflation falls, unemployment falls

10. 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.

Submitted: 5 years ago.
Category: Homework
Expert:  Ellen replied 5 years ago.

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