Economics Chapter 1 Review

Transcription

1 Name: Class: Date: ID: A Economics Chapter 1 Review Matching a. goods e. land b. economics f. capital c. shortage g. services d. labor h. human capital 1. when consumers want more of a good or service than producers are willing to offer at a particular price 2. physical objects such as baseballs or umbrellas 3. the study of how people make decisions to satisfy their needs and wants 4. the effort that a person devotes to a task for which the person is paid 5. all natural resources used to produce goods and services 6. knowledge gained from education and experience Key Terms and Concepts Directions: Match the terms with the descriptions. Write the letter of the correct answer in the blank provided. Not all of the choices will be used. a. need j. labor b. want k. capital c. goods l. trade-off d. services m. opportunity cost e. scarcity n. marginal cost f. shortage o. marginal benefit g. entrepreneur p. economics h. factors of production q. efficiency i. land r. underutilization 7. something people desire that is not necessary for survival 8. something essential for survival 9. physical objects that someone produces 10. actions or activities that one person performs for another 11. the study of how people seek to satisfy their needs and wants by making choices 12. principle that limited amounts of goods and services are available to meet unlimited wants 13. resources that are used to make goods and services 14. all natural resources used to make goods and services 15. effort people devote to tasks for which they are paid 1

2 Name: ID: A 16. person who decides how to combine resources to create goods and services 17. any human-made resource that is used to produce other goods and services 18. the most desirable alternative given up as the result of a decision 19. the extra cost of adding one unit 20. the extra benefit of adding one unit 21. use of fewer resources than an economy is capable of using 22. use of resources in such a way as to maximize the output of goods and services Completion Complete each statement. 23. Giving up one benefit in order to gain a greater benefit is a(n). 24. The most desirable alternative given up as a result of a decision is the. 25. The extra cost of adding one unit is the. 26. Deciding by thinking at the margin is called. 27. A(n) is a visual way of examining opportunity costs. 28. A graph that shows alternative ways to use an economy s productive resources is a. 29. When a country s maximum possible output is plotted on a graph, it is called the. 30. When an economy uses fewer production resources than it would at maximum production, it is called. 31. The use of resources to maximize the output of goods and services is. 32. The curve usually seen in a production possibilities frontier can be explained by the. Multiple Choice Identify the choice that best completes the statement or answers the question. 33. What is the difference between a shortage and a scarcity? a. A shortage can be temporary or long-term, but scarcity always exists. b. A shortage results from rising prices; scarcity results from falling prices. c. A shortage is a lack of all goods and services; scarcity concerns a single item. d. There is no real difference between a shortage and a scarcity. 2

3 Name: ID: A Main Ideas Directions: Write the letter of the correct answer in the blank provided. 34. Which of the following is an example of a shortage? a. Water cannot be used to irrigate one crop because it is used for another. b. Kumquats are not available because few people want to buy them. c. A type of doll is not available because a limited number were made. d. Workers are not available because they have other jobs. 35. All goods and services are scarce because a. some goods cost more than others. b. resources are limited. c. things are either needs or wants. d. greedy people want too many goods. 36. Scarcity requires that people make trade-offs because a. people have more wants than needs. b. there is a limited supply of resources. c. services are more available than goods. d. producers rarely make enough of a good. 37. Which of the following people is an entrepreneur? a. a person who earns a lot of money as a singer or dancer b. a person who creates a game and sells it to a game manufacturer c. a person who starts an all-organic cleaning supplies business that employs others d. a person who works as a highly-paid computer programmer 38. One example of an entrepreneur is a. a writer who is hired by a film studio to adapt a novel into a screenplay. b. a secretary in a law firm that specializes in business law. c. an ice skater who is part of a professional ice show. d. an artist who runs a business painting murals in office buildings and restaurants. 39. Which of the following lists of factors of production would an economist categorize as land? a. factories, office buildings, assembly lines, workers b. farm fields, tractors, pesticides, fertilizers c. dams, bridges, rock quarries, oil wells d. iron ore, natural gas, fertile soil, water 40. Which of the following is an example of using physical capital to save time and money? a. hiring more workers to do a job b. building extra space in a factory to simplify production c. switching from oil to coal to make production cheaper d. lowering workers wages to increase profits 41. Which of the following are factors of production? a. capital and land b. scarcity and shortages c. technology and productivity d. economics and business decisions 3

4 Name: ID: A 42. A factory building is an example of which factor of production? a. human capital b. physical capital c. land d. labor 43. Which of the following is an example of a firm trying to increase its human capital? a. building a company cafeteria b. hiring more part-time workers c. paying for employees education d. leasing cars for employees 44. The physical capital used by a woodworker to make furniture would include a. saws and drills. b. trees and oil. c. hard work and time. d. a workshop and money. 45. Human capital includes a. the salary paid to an accountant. b. the knowledge a taxi driver has of the city streets. c. the machinery run by a seamstress to weave cloth. d. the equipment used by a doctor to cure a patient. 46. The economic concept of guns or butter means that a. a person can spend money on either sports equipment or food. b. a company must decide whether to manufacture guns or butter. c. a government must decide to produce more or less military or consumer goods. d. a government can buy unlimited military and civilian goods if it is rich enough. 47. If you choose between two summer jobs, the one you do not choose is the of your decision. a. trade-off b. opportunity cost c. decision at the margin d. opportunity at the margin 48. Every decision involves trade-offs because a. everyone has to make decisions. b. everyone s resources are limited. c. some people have more money than others. d. some decisions are made for business, others for society. 49. The government of a country must make a decision between increasing military spending and subsidizing wheat farmers. This is an example of a. a guns or butter issue. b. decision-making at the margin. c. underutilization of resources. d. the law of increasing costs. 4

5 Name: ID: A 50. You bought two new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity cost of these CDs? a. the difference between the cost to produce the CDs and the price you paid for them b. the $30 check that you wrote for the CDs c. the night out with your friends that you miss because you can t afford it now d. the satisfaction of knowing you are the first of your friends to have these CDs 51. Making a decision at the margin is possible only in situations where a. the available opportunity costs are unclear or complicated. b. the available alternatives can be divided into increments. c. there are more than three different types of alternatives to consider. d. there are differences in the amount of time each alternative will consume. 52. A decision is made at the margin when each alternative considers a. a different trade-off than the others. b. where the most costly alternative will be. c. what the all or nothing alternative will be. d. cost and benefit ranked in progressive units. 53. When a theater owner considers whether to install another row of seating, she is a. underutilizing her resources. b. experiencing a shortage. c. using human d. thinking at the margin. 54. Which of the following is the kind of decision that can be made at the margin? a. whether or not to hire new workers b. whether or not to go on a vacation c. whether or not to build an extra room on a home d. whether to have a dog or a cat as a pet 55. What can a decision-making grid do? a. tell you the right decision to make b. show you every possible consequence of your decision c. help you determine some of the opportunity costs for your decision d. show you every possible benefit of your decision 5

6 Name: ID: A Decision Making at the Margin Options Benefits Opportunity Costs Work 1 hour 1 hour s pay 1 hour of study or recreation time Work 2 hours 2 hours pay 2 hours of study or recreation time Work 3 hours 3 hours pay 3 hours of study or recreation time Work 4 hours 4 hours pay 4 hours of study or recreation time Work 5 hours 5 hours pay 5 hours of study or recreation time 56. Jed has one hour available after school each weekday. The rest of the afternoon is taken up by other activities. He is evaluating what to do with those 5 hours. According to the chart, which option has the least benefit? a. working 1 hour b. working 2 hours c. working 4 hours d. working 5 hours 57. If Jed uses the grid to decide to earn the maximum pay, what will be the trade-off? a. There won t be any trade-off, only benefits. b. He will add another hour to the available time to use for study. c. He will have a balance of work and study or recreation time. d. There will be no time for study or recreation. 58. A production possibilities curve shows the relationship between the production of a. farm goods and factory goods. b. two types of farm goods. c. two types of factory goods. d. any two categories of goods. 6

7 Name: ID: A Directions: Use the graph below to answer questions 22 and The graph shows how many new schools and new roads a city could build using all of its factor resources. What does the current production possibilities curve show? a. As the number of schools increases, so does the number of roads. b. As the number of schools increases, the number of roads decreases. c. As the number of schools decreases, so does the number of roads. d. The number of schools has no effect on the number of roads. 60. The line on a production possibilities curve showing the relative amounts of two types of goods produced using all resources is called the a. production possibilities frontier. b. opportunity cost line. c. utilization of resources. d. maximum possible production line. 7

8 Name: ID: A 61. The future production possibilities frontier on this graph shows what might happen if a. resources were underutilized. b. there was a shortage of paving equipment. c. the cost of building materials went down. d. more resources went to building roads. 62. Increasing the number of laborers in an economy generally causes a(n) a. increase in the production possibilities curve. b. decrease in the production possibilities curve. c. increase in the opportunity cost of production. d. decrease in the opportunity cost of production. 63. An economy that is producing the maximum amount of goods and services is considered a. efficient. b. underutilized. c. growing. d. trading off. 64. An efficient economy is one that a. creates new resources through ongoing research and development. b. conserves its resources through underutilization. c. uses its resources to make the most goods and services. d. does not face the problem of scarcity. 65. A region s production possibilities curve might show underutilization of resources if the region experienced a. tax increases. b. an influx of immigrant labor. c. a large flood. d. growth of its industries. 66. A company that makes baseball caps is underutilizing its resources. What does this mean? a. The company is running more efficiently than its competitors. b. The company is paying its employees less than it should be. c. The company is making caps when it could be making t-shirts instead. d. The company is producing fewer caps than it could be. 67. The law of increasing costs means that as production shifts from one item to another, a. the cost of production gets cheaper and cheaper. b. the cost of producing an item stays the same no matter how many are produced. c. more and more resources are necessary to increase production of the second item. d. the land costs of increasing production rise much more steeply than do the labor costs. 68. The law of increasing costs means that when an economy increases the production of one item the a. opportunity cost goes up. b. actual cost of making the item goes down. c. actual cost goes up but the opportunity cost goes down. d. production costs will increase also. 8

9 Name: ID: A 69. The community of Desertville traditionally produces a large number of tires and a small amount of kiwi fruit. Kiwis are becoming increasingly popular, and Desertville has decided to expand kiwi cultivation and decrease tire manufacturing. According to the law of increasing costs, a. the opportunity cost of producing tires will increase. b. the opportunity cost of producing kiwis will increase. c. the opportunity cost of producing tires will decrease. d. the opportunity cost of producing kiwis will decrease. 70. A nation s automakers install new robotic machinery to build cars. As a result, cars take only a day to make, and the factories can produce many more cars than before. This is an example of growth caused by a. natural resources. b. labor. c. technology. d. production possibility curves. Short Answer: You MUST answer TWO QUESTIONS for FIVE POINTS EACH. Additional correct answers earn one point of extra credit. 71. In your own words, describe what entrepreneurs do. 72. Why is a guns or butter decision an example of a trade-off? Critical Thinking and Writing Directions: Use complete sentences to answer the questions below. 73. How does a production possibilities curve illustrate the law of increasing costs? 9

10 Name: ID: A 74. If an economy s production possibilities curve indicates that the economy is working at its most efficient level, is this proof that an economy is growing over time? 75. How do resources and technology affect a country s production possibilities? 10

11 ID: A Economics Chapter 1 Review Answer Section MATCHING 1. ANS: C PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Systems Shortage 2. ANS: A PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Systems Goods 3. ANS: B PTS: 2 DIF: L3 REF: A.4 STA: G.2 TOP: Economic Systems Economics 4. ANS: D PTS: 2 DIF: L3 REF: A.5 TOP: Economic Systems Labor 5. ANS: E PTS: 2 DIF: L3 REF: A.5 OBJ: Identify the constitutional protections that underlie free enterprise. STA: B.1 B.2 TOP: Economic Systems Land 6. ANS: H PTS: 2 DIF: L3 REF: A.6 TOP: Economic Systems Human Capital 7. ANS: B PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Choices Scarcity and Choice 8. ANS: A PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Choices Scarcity and Choice 9. ANS: C PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Choices Scarcity and Choice 10. ANS: D PTS: 2 DIF: L3 REF: A.3 STA: G.2 TOP: Economic Choices Scarcity and Choice 11. ANS: P PTS: 2 DIF: L3 REF: A.4 STA: G.2 TOP: Economic Choices Scarcity and Choice 12. ANS: E PTS: 2 DIF: L3 REF: A.4 OBJ: Explain how scarcity affects the factors of production STA: G.2 TOP: Economic Choices Scarcity and Choice 13. ANS: H PTS: 2 DIF: L3 REF: A.5 OBJ: Describe what entrepreneurs do NAT: STA: F.7 TOP: Economic Choices Entrepreneurs 1

12 ID: A 14. ANS: I PTS: 2 DIF: L3 REF: A.5 TOP: Economic Choices Land 15. ANS: J PTS: 2 DIF: L3 REF: A.5 TOP: Economic Choices Labor 16. ANS: G PTS: 2 DIF: L3 REF: A.5 OBJ: Describe what entrepreneurs do NAT: STA: F.7 TOP: Economic Choices Entrepreneurs 17. ANS: K PTS: 2 DIF: L3 REF: A.6 TOP: Economic Choices Capital 18. ANS: M PTS: 2 DIF: L3 REF: A.9 OBJ: Summarize the concept of opportunity cost. STA: G.3 TOP: Economic Choices Opportunity Cost 19. ANS: N PTS: 2 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Choices Margin 20. ANS: O PTS: 2 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Choices Margin 21. ANS: R PTS: 2 DIF: L3 REF: A.15 OBJ: Explain why a country's production possibilities depend on its resources and technology. TOP: Economic Choices Efficiency 22. ANS: Q PTS: 2 DIF: L3 REF: A.15 OBJ: Explain why a country's production possibilities depend on its resources and technology. TOP: Economic Choices Efficiency COMPLETION 23. ANS: trade-off PTS: 2 DIF: L3 REF: A.8 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Systems Trade-offs 24. ANS: opportunity cost PTS: 2 DIF: L3 REF: A.9 OBJ: Summarize the concept of opportunity cost. STA: G.3 TOP: Economic Systems Opportunity Cost 25. ANS: marginal benefit PTS: 2 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Systems Marginal Cost 2

13 ID: A 26. ANS: cost/benefit analysis PTS: 2 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Systems Cost-Benefit Analysis 27. ANS: decision-making grid PTS: 2 DIF: L3 REF: A.11 OBJ: Summarize the concept of opportunity cost. STA: G.3 KEY: Economic Systems Opportunity Cost 28. ANS: production possibilities curve PTS: 2 DIF: L3 REF: A.13 OBJ: Interpret a production possibilities curve. TOP: Economic Systems Production Possibilities Curves 29. ANS: production possibilities frontier PTS: 2 DIF: L3 REF: A.14 TOP: Economic Systems Production Possibilities Frontier 30. ANS: underutilization PTS: 2 DIF: L3 REF: A.15 TOP: Economic Systems Underutilization 31. ANS: efficiency PTS: 2 DIF: L3 REF: A.15 TOP: Economic Systems Efficiency 32. ANS: law of increasing costs PTS: 2 DIF: L3 REF: A.18 TOP: Economic Systems Law of Increasing Costs MULTIPLE CHOICE 33. ANS: A Unlike shortages, scarcity always exists. PTS: 3 DIF: L3 REF: A.4 STA: G.2 TOP: Economic Systems Scarcity vs. Shortage 3

14 ID: A 34. ANS: C A shortage occurs when consumers want more of a good or service than producers are willing to make available at a particular price. PTS: 3 DIF: L3 REF: A.4 STA: G.2 TOP: Economic Choices Shortages 35. ANS: B People s wants are unlimited, but resources to make goods and services to fulfill those wants are always limited. PTS: 3 DIF: L3 REF: A.4 OBJ: Explain how scarcity affects the factors of production STA: G.2 TOP: Economic Choices Scarcity and Choice 36. ANS: B Scarcity exists because all resources are limited. PTS: 5 DIF: L4 REF: A.4 STA: G.2 TOP: Economic Choices Scarcity 37. ANS: C Entrepreneurs start their own businesses. PTS: 3 DIF: L3 REF: A.5 OBJ: Describe what entrepreneurs do NAT: STA: F.7 TOP: Economic Systems Entrepreneurs 38. ANS: D Entrepreneurs are people who decide how to combine resources to create new goods and services. Anyone who opens a business, like the artist, is an entrepreneur. PTS: 3 DIF: L3 REF: A.5 OBJ: Describe what entrepreneurs do NAT: STA: F.7 TOP: Economic Choices Entrepreneurs 39. ANS: D Economists use the term land to refer to all natural resources used to produce goods and services. PTS: 3 DIF: L3 REF: A.5 TOP: Economic Choices Land 40. ANS: B Physical capital includes buildings, such as a factory. PTS: 3 DIF: L3 REF: A.6 TOP: Economic Systems Physical Capital 4

15 ID: A 41. ANS: A The factors of production are land, labor, and PTS: 3 DIF: L3 REF: A.6 TOP: Economic Systems Factors of Production 42. ANS: B Human-made objects used to create other goods and services are physical PTS: 3 DIF: L3 REF: A.6 TOP: Economic Choices Capital 43. ANS: C Education increases skills and thereby increases human PTS: 3 DIF: L3 REF: A.6 OBJ: Explain how scarcity affects the factors of production STA: G.2 TOP: Economic Choices Human Capital 44. ANS: A Human-made objects used to create other goods and services are physical PTS: 3 DIF: L3 REF: A.6 TOP: Economic Choices Capital 45. ANS: B Human capital is defined as the knowledge and skills a worker gains through education and experience. PTS: 3 DIF: L3 REF: A.6 TOP: Economic Choices Capital 46. ANS: C The term guns or butter refers to the choice between spending money on military or domestic needs. PTS: 3 DIF: L3 REF: A.9 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Systems Opportunity Cost 47. ANS: B Opportunity cost is the most desirable alternative not chosen when a decision is made. PTS: 3 DIF: L3 REF: A.9 OBJ: Summarize the concept of opportunity cost. STA: G.3 TOP: Economic Systems Opportunity Cost 48. ANS: B Every decision involves trade-offs because scarcity always exists. PTS: 3 DIF: L3 REF: A.9 STA: G.2 TOP: Economic Systems Trade-offs 5

16 ID: A 49. ANS: A Economists and politicians use the term guns or butter to describe a country s choice of spending money on military or domestic needs. PTS: 3 DIF: L3 REF: A.9 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Choices Trade-Offs 50. ANS: C The most desirable alternative somebody gives up as the result of a decision is the opportunity cost. PTS: 5 DIF: L4 REF: A.9 OBJ: Summarize the concept of opportunity cost. STA: G.3 TOP: Economic Choices Opportunity Cost 51. ANS: B Thinking at the margin means making decisions about adding or subtracting one unit. PTS: 3 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Systems Thinking at the Margin 52. ANS: D Making decisions at the margin means deciding whether to add or subtract progressive units. PTS: 3 DIF: L3 REF: A.11 TOP: Economic Systems Thinking at the Margin 53. ANS: D Thinking at the margin describes decisions about the cost and benefit of providing more or less of a good or service. PTS: 3 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Choices Margin 54. ANS: A Thinking at the margin describes decisions on how much more or less one should do economically. PTS: 3 DIF: L3 REF: A.11 OBJ: Describe how people make decisions by thinking at the margin. NAT: TOP: Economic Choices Margin 55. ANS: C A decision-making grid shows the opportunity costs for the possible choices a person can make. PTS: 3 DIF: L3 REF: A.11 OBJ: Summarize the concept of opportunity cost. STA: G.3 TOP: Economic Choices Decision-Making Grids 6

17 ID: A 56. ANS: A A benefit is what a person gains from a decision. In this case, working one hour has the least benefit because it offers the least amount of pay. PTS: 3 DIF: L3 REF: A.11 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Choices Benefits 57. ANS: D If Jed chooses to work during all five hours, there will be no time left for other activities. PTS: 5 DIF: L4 REF: A.11 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Choices Trade-Offs 58. ANS: D A production possibilities curve is a graph that shows alternative ways to use an economy s productive resources. PTS: 3 DIF: L3 REF: A.13 OBJ: Interpret a production possibilities curve. TOP: Economic Systems Production Possibilities Curves 59. ANS: B Without a change in resources, the number of roads must decrease in order for the number of schools to increase. PTS: 5 DIF: L4 REF: A.13 OBJ: Interpret a production possibilities curve. TOP: Economic Choices Production Possibilities 60. ANS: A The production possibilities frontier shows the maximum combination of two types of goods that can be produced using all resources. PTS: 3 DIF: L3 REF: A.14 OBJ: Interpret a production possibilities curve. TOP: Economic Systems Production Possibilities Curves 61. ANS: C The production possibilities frontier would shift to the right if there was an increase in one of the factors of production. PTS: 5 DIF: L4 REF: A.14 OBJ: Interpret a production possibilities curve. TOP: Economic Choices Production Possibilities 62. ANS: A A rise in a factor of production increases the maximum amount of goods an economy can produce. PTS: 3 DIF: L3 REF: A.15 TOP: Economic Systems Production Capacity 7

18 ID: A 63. ANS: A An economy is producing efficiently when it is producing the maximum amount of goods and services that its production resources allow. PTS: 3 DIF: L3 REF: A.15 TOP: Economic Systems Efficiency 64. ANS: C An efficient economy uses resources in such a way as to maximize the output of goods and services. PTS: 3 DIF: L3 REF: A.15 TOP: Economic Choices Efficiency 65. ANS: C A natural disaster such as a flood could cause a region s output to go down until the damage is repaired. PTS: 3 DIF: L3 REF: A.15 OBJ: Interpret a production possibilities curve. TOP: Economic Choices Underutilization 66. ANS: D Underutilization is the use of fewer resources than an economy is capable of using. PTS: 3 DIF: L3 REF: A.15 OBJ: Explain why a country's production possibilities depend on its resources and technology. TOP: Economic Choices Efficiency 67. ANS: C The law of increasing costs states that as production shifts from making one good or service to another, more and more resources are needed to increase production of the second good or service. PTS: 3 DIF: L3 REF: A.17 TOP: Economic Systems Law of Increasing Costs 68. ANS: A According to the law of increasing costs, as production shifts from making one item to another, more and more resources are necessary to increase production of the second item. Therefore, the opportunity cost increases. PTS: 3 DIF: L3 REF: A.17 TOP: Economic Choices Cost 69. ANS: B The law of increasing costs states that as production shifts from making one item to another, more and more resources are necessary to increase production of the second item. Therefore, the opportunity cost increases. PTS: 3 DIF: L3 REF: A.17 TOP: Economic Choices Cost 8

19 ID: A 70. ANS: C Technology is the process used to create goods and services. It usually increases efficiency of workers. PTS: 3 DIF: L3 REF: A.18 OBJ: Explain why a country's production possibilities depend on its resources and technology. TOP: Economic Choices Technology SHORT ANSWER 71. ANS: Possible response: They take risks to start new businesses or develop new methods of doing things that help boost the economy. They gather the factors of production. PTS: 5 DIF: L3 REF: A.5 OBJ: Describe what entrepreneurs do NAT: STA: F.7 TOP: Economic Choices Entrepreneurs 72. ANS: When a government makes a guns or butter decision, it makes a choice between military or domestic spending. In choosing, the government trades off one type of benefit for another. PTS: 5 DIF: L3 REF: A.9 OBJ: Explain why every decision involves trade-offs STA: G.3 TOP: Economic Choices Trade-Offs 73. ANS: As you move along the production possibilities curve from the middle toward either end, you trade off more and more for less and less added output. This increasing cost that is not proportional to the increased output shows up on the graph as a curved line. PTS: 7 DIF: L4 REF: A.13 TOP: Economic Choices Production Possibilities 74. ANS: No. A production possibilities curve is a snapshot. An economy could be maximizing its production or output of goods and services at a point in time, but events can move the curve in either direction over time. PTS: 7 DIF: L4 REF: A.15 TOP: Economic Choices Efficiency 75. ANS: A country can only produce as much as its resources will allow. Technology can help make production more efficient. PTS: 5 DIF: L3 REF: A.18 OBJ: Explain why a country's production possibilities depend on its resources and technology. TOP: Economic Choices Resources 9