Economic Concepts Review - PPC, Efficiency, and Economic Systems

Fill-in-the-blank practice questions covering PPC concepts, efficiency, opportunity cost, absolute and comparative advantage, and economic systems from the lecture notes.

Points on the Production Possibilities Curve (PPC) represent __ production.

efficient production

A movement from point B to point E on the PPC indicates __.

unemployment (underutilization of resources)

An outward shift of the PPC due to more capital goods without sacrificing current consumption represents __.

economic growth (outward PPC shift)

Absolute advantage is the ability to produce more of a good with the same __.

resources (inputs)

Comparative advantage occurs when a country has the __ opportunity cost in producing a good.

lower

In the coconuts vs fish example, country __ has the comparative advantage in coconuts.

two

For fish, the country with the comparative advantage is __.

one

Country one must give up __ of a fish to produce one coconut.

4/3

A straight PPC implies constant __ cost.

opportunity

A curved PPC implies increasing __ cost.

opportunity cost

Productive efficiency occurs when production is on the __.

PPC frontier

Allocative efficiency concerns whether the economy is producing at the point that satisfies society's __.

preferences

The three essential questions of economics are: What goods and services will be produced? How will those goods and services be produced? __ will they be produced?

For whom

The four economic systems are traditional, market, command, and __.

mixed

Decision making in a market economy is called __ enterprise.

free

In China, land is owned by the government and leased to individuals, illustrating a __ economy.

command/state-controlled

Trade allows consumption to be __ the PPC.

outside