Each nation can produce beans and rice

TOPIC WHAT IS ECONOMICS? SUMMARY

WHAT IS ECONOMICS?

buying and selling.

scarcity and choices.

	What Is Economics? \| Acrobatiq g	y

choices that societies must make, in a purposeful way, to utilize and distribute resources.

The production possibility curve relies on which of the following assumptions?

The labor force is growing every day.
Technology is improving every day.
All resources are fully utilized.

a(n)	increase	in the economy.

Question 6 of 15

	4/9

6/27/2019 What Is Economics? | Acrobatiq

False


An overall increase in available resources (for instance, growth in the labor market) will cause the production possibilities frontier curve to

known as	capital	.

Why will goods be produced? Where will goods be produced?
	6/9

A	market
A

Question 12 of 15
True or false. A traditional economy relies on a centralized government authority to guide and direct production and consumption decisions.

Assume Mexico and the United States have labor forces of equal size (for simplicity), and operate in an environment of constant costs. Each nation can produce beans and rice, but at different efficiency levels. Assume pre-specialization levels as follows:

U.S.: (Pre-specialization) 12 rice, 12 beans; (post-specialization) 24 beans, 0 rice

2R = 1B

1R = 1B

cost, both parties will gain from trade.

Correct. For both parties to gain from trade, the cost of an

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