Ib Work

822 WordsMay 8, 20134 Pages
Name: AP Economy Review Packet QUESTIONS 1. Economics is best described as a. the study of how scarce material wants are allocated between unlimited resources. b. the study of how scarce labor can be replaced by unlimited capital. c. the study of how decision makers choose the best way to satisfy their unlimited material wants with a scarce supply of resources. d. the study of how unlimited material wants can best be satisfied by allocating limitless amounts of productive resources. e. the study of how capitalism is superior to any other economic system. 2. A student decides that, having already spent three hours studying for an exam, she should spend one more hour studying for the same exam.…show more content…
5. Ray and Dorothy can both cook and can both pull weeds in the garden on a Saturday afternoon. For every hour of cooking, Ray can pull 50 weeds and Dorothy can pull 100 weeds. Based on this information, u. Ray pulls weeds since he has absolute advantage in cooking. v. Dorothy pulls weeds since she has absolute advantage in cooking. w. Dorothy cooks since she has comparative advantage in cooking. x. Ray cooks since he has comparative advantage in cooking. y. Dorothy pulls weeds since she has comparative advantage in cooking. 6. 2) What is this relationship between an economy 's growth, its production possibilities frontier (PPF), and the economy 's long-run aggregate supply curve (LRAS)? (a) Growth is shown by a movement down the PPF and a movement up the LRAS. (b) Growth is shown by an outward shift in both the PPF and the LRAS curve. (c) Growth is shown by a leftward shift in the PPF and a rightward shift in the LRAS curve (d) Growth is shown by an outward shift in the PPF and by a leftward shift in the LRAS curve (e) Growth is shown by an inward shift in the PPF and an outward shift in the LRAS ANSWERS AND EXPLANATIONS 1. C—It is important to remember that society has a limitless desire for material wants, but satisfaction of these wants is limited by scarce economic resources. Economics studies how to solve this problem in the best possible
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