I have included the answers but Please explain each one in details why is that t
ID: 1099712 • Letter: I
Question
I have included the answers but Please explain each one in details why is that the answer.
The answers are :
22) B
23) C
24) B
Economists can unequivocally tell which point of production is ideal. If a country does not trade with other countries then: its consumption possibilities are less than its production possibilities. its consumption possibilities are greater than its production possibilities. its production possibilities will be equal to its consumption possibilities. its production possibilities will be greater than its consumption possibilities. When two countries gain from trade: one country must have an absolute advantage over the other in producing all goods. both countries can move beyond their domestic production possibilities. one country must have a comparative advantage over the other in producing all goods. both countries must be equal in size.Explanation / Answer
22) "B" is the correct answer because an Economist cannot tell which point of production is ideal. If you look at the graph above question number 22: A, B, C, D, E, or F all are possible production outputs for two goods given the economies resources. It simply depends on what the economy demands and then you can allocate production to the goods as neccesary. NOTE: Point G is not currently possible with the amount of resources the economy has since it is located outside the PPF curve. Point H means that the resources are not being used efficently and the economy is underproducing.
23) "C" is the correct answer because when a country does not engage in trade it does not allow for the opportunity of growth and production possibilites will = consumption possibilities. Trade between countries allows PPF to shift outward due to resources being used on other products (Answer D). Answers A and B are just definitions of what an economic boom is and what a recesion is and thus are incorrect.
24) "B" is the correct answer because when another country specializes in producing a good the other country no longer has to dedicate its resources to creating this product. More resources are now available to be dedicated to other products. This allows Production Possibilities to increase making B the correct answer. D is obviously incorrect. A and C are incorrect because having an advantage in producing a good is not neccesary, because no matter what you are freeing up resources thus resulting in PPF shifting outward.
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