ECN 104 Lecture Notes - Lecture 2: Full Employment, Opportunity Cost, Comparative Advantage

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21 Feb 2017

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Laissez-faire capitalism, the command system, and a market system. List the main characteristics of the market system. Labour consists of the physical actions and mental activities that people contribute to the production of goods and services. Land includes all natural resources ( gifts of nature ) used in the production process. Capital includes all manufactured aids used in producing consumer goods and services. Entrepreneurial ability is the special human resource, distinct from labour. This economy devotes all its available resources to productions of books. Assumptions: full employment, fixed resources, fixed technology. Absolute advantage a country has an absolute advantage if that country is more productive than others. Comparative advantage a country has a comparative advantage in an activity if that country can perform the activity at a lower opportunity cost than other countries. Achieving gains from trade specialization and free trade allows. Laissez-faire capitalism the governments role is limited to protecting private property, and establishing a legal environment.

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Microeconomics

A	B	Answer
As a student of economics, when you speak of scarcity, you are referring to the ability of society to.	A. Extra benefit
What is the economic meaning of the expression that "There is no such thing as a free lunch?"	B. Entrepreneur.
Which expression is another way of saying "marginal benefit"?	C. Very limited government role in the economy
A tradeoff exists between two economic goals, X and Y. This tradeoff means that.	D. Price ceilings and the resulting product shortages.
The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the	E. Explicit costs.
The Soviet Union economy of the 1980s would best be classified as	F. Easy entry, many firms, and differentiated products
The simple circular-flow model shows that workers, entrepreneurs, and the owners of land and capital offer their services through	G. Product markets
Laissez-faire capitalism is characterized by	H. Satisfy economic wants given limited resources.
Black markets are associated with	I. Oligopoly
Cash expenditures a firm makes to pay for resources are called	J. The Resource Markets
Which set of characteristics below best describes the basic features of monopolistic competition	K. A command System
Mutual interdependence would tend to limit control over price in which market model	L. Getting more of X requires getting less of Y
Markets in which firms sell their output of goods and services are called	M. It means that there is an opportunity cost when resources are used to provide "free" products

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ECN 104 Lecture Notes - Lecture 2: Full Employment, Opportunity Cost, Comparative Advantage

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