iVAT Chapter 2

A  All of the resources might not be able to transferred between the sectors in an economy.  This will effectively leave some resources to remain idle.

B  There can be productivity gains in one sector.

C  Countries won’t necessarily produce what they have comparative advantage in.

D  A financial bubble an occur that causes production to be greater than predicted.

E  All of the resources will be transferred between the sectors in an economy.  This will effectively leave some resources to remain idle. This can cause productivity declines in the short-term.

A  gains from trade

B  a productive capacity decline in one good

C  comparative advantage gains

D  disequilibrium

E  a productivity capacity decline in both goods

A  can be attainable and complex

B  can occur when all resources are not being utilized

C  can be due to comparative advantage

D  can be attainable and efficient

E  can occur when the maximum amount of production possible is taking place

A  attainable and deficient

B  unattainable

C  disentangled

D  due to comparative advantage

E  attainable and inefficient

A  extremely flat

B  a straight line

C  exponential

D  relatively flat

E  bowed outward

A  must be bowed inwards

B  must be inverted

C  a straight line

D  must be bowed outwards

E  an indeterminate shape

A  all resources are equally effective in the production of all goods

B  specialization and the division of labor help markets function more effectively

C  some resources, people, firms, and nations are more efficient at producing certain goods/services than alternative goods/services.

D  opportunity costs are maximized.

E  labor increases efficiency

A  resources that are better suited towards glass production are being converted from the iron sector

B  the production possibilities curve is becoming steeper

C  the production possibilities curve shifted inwards

D  resources that are better suited towards iron production are being converted from the glass sector

E  the economy is violating the law of increasing costs

A  diverting opportunity costs

B  increasing opportunity costs

C  production possibility surpluses

D  comparative complexity

E  decreasing marginal opportunity costs

A  comparative disadvantage

B  of inefficiency

C  where 90 percent of the economy is devoted to producing that good

D  where 100 percent of the economy is devoted to producing that good

E  where 150 percent of the economy is devoted to producing that good