2012 (Macro) Multiple Choice - Basic, PPC, Comp ADV

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...