2012 (Macro) Multiple Choice - Basic, PPC, Comp ADV
Answer - (A) Centralised planning
This is the main tenant of a command economy.
Answer - (C)
Answer - (B)
So, easy to find who has an absolute advantage by drawing a PPC curve,,
B can create both goods using less resources
Comparative advantage must be analysed using the math and then comparing the columns.
Looking for the country that shows the lowest opportunity cost.
Answer - (B) Involves higher costs for each transaction
Answer - (E)
(A) Z = unemployment, idle resources, underutilisation of resources = True
(B) Y = unattainable given the amount of resources
(C) W & X - fully utilised resources
(D) Capital goods are goods that promote future growth
(E) X & W are both efficient, and only society can decide which is the best for society
Answer - (D)
Trade pushes out the PPC boundary/curve
Answer - (E)
The same thing that pushes out the PPC boundary is
Population, resources,
technology, trade, human capital – at least one of these must increase
are the same things that shift the LRAS curve to the right...
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