Eco03L2 1 Capital is _________________. a special resource that organizes the other resources any good with a long life the money that firms have to spend the goods that can be used to produce other goods and services 2 Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides without producing fewer boat rides. Harry is ___________________his production possibility frontier. producing on moving along producing outside producing inside 3 Production efficiency occurs when production _______________________. is at any attainable point is specialized is on the production possibility frontier or inside it of more of any good requires producing less of some other good 4 The figure shows Roger's production possibility frontier. Point a is an ___________________ point and production is ___________________. unattainable; inefficient unattainable; efficient attainable; efficient attainable; inefficient 5 Vicky currently produces at point a in the figure. If Vicky moves from point a to point b, her opportunity cost of a modem _______________________. decreases is zero remains the same increases 6 A country produces only pencils and erasers. Pencil production is efficient if the marginal _____________ of a pencil equals the marginal _________ of ___________. cost; benefit; an eraser cost; cost; an eraser benefit; benefit; an eraser benefi; cost; a pencil 7 When economic growth occurs, the production possibility frontier shifts inward production possibility frontier shifts outward economy moves along its production possibility frontier opportunity cost of all goods decreases 8 In an hour, Andy can make either 6 pizzas or 12 pies and Chris can make either 6 pizza or 18 pies. _____________________________advantage in making pizzas. Chris has an absolute Chris has a comparative Andy has a comparative Andy has an absolute 9 Anna and Maria produce shirts and ties. The figure shows Anna's PPF and Maria's PPF. Anna and Maria can reap the gains from trade if Anna produces _______ and Maria produces __________. shirts; ties only ties; shirts and ties ties; shirts shirts and ties; only ties 10 Big Lobster sells lobster and fish, and so too does H Salt. If Big Lobster's opportunity cost of preparing lobster exceeds H Salt's opportunity cost, then all the following are true except H Salt has a comparative advantage in lobster. Big Lobster has a comparative advantage in lobster. They will both gain if Big Lobster sells fish and H Salt sells lobster. H Salt doesn't have a comparative advantage in cooking fish. Please enter your name and press the SEND button