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Questions and Answers
David's comparative advantage is in coconuts.
David's comparative advantage is in coconuts.
False
The opportunity cost of production is lower when a PPF is bowed outward.
The opportunity cost of production is lower when a PPF is bowed outward.
True
Opportunity cost, scarcity, economic growth, choice, and unemployed resources are not linked within the PPF framework analysis.
Opportunity cost, scarcity, economic growth, choice, and unemployed resources are not linked within the PPF framework analysis.
False
If a country's PPF shifts inward due to population growth, the material standard of living of the people will improve on average.
If a country's PPF shifts inward due to population growth, the material standard of living of the people will improve on average.
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Political instability leading to famine can cause a positive shift in the PPF.
Political instability leading to famine can cause a positive shift in the PPF.
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Specialization and trade do not lead to gains for both parties involved.
Specialization and trade do not lead to gains for both parties involved.
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Comparative advantage is solely determined by the absolute productivity levels of each country.
Comparative advantage is solely determined by the absolute productivity levels of each country.
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A PPF represents the maximum combinations of goods that can be produced with available resources.
A PPF represents the maximum combinations of goods that can be produced with available resources.
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Unemployed resources have no opportunity cost in production.
Unemployed resources have no opportunity cost in production.
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Economic growth always leads to an outward shift of the PPF.
Economic growth always leads to an outward shift of the PPF.
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