Econ CH1L3

Economic growth is an increase in a nation's output of goods and services over time.

• True

• False

Economic growth usually can be achieved without investing in new resources.

• True

• False

Economic growth causes the production possibilities frontier to contract.

• True

• False

Separation of tasks to be performed by different workers is division of labor.

• True

• False

Which of the following would result in a change in the production possibilities frontier in the mythical country Alpha?

• an influx of immigrants from other countries

• the discovery of an abundant natural resource

• a long drought

• all of the above

In the mythical country Alpha, an entrepreneur has introduced a new technology that makes manufacturing twice as efficient as before. How is this likely to affect the production possibilities frontier?

• It would not change the frontier.

• It would make the frontier smaller.

• It would expand the frontier.

• It would change the shape of the frontier.

The amount of output in a specific amount of time with a given amount of resources is referred to as

• productivity.

• human capital.

• efficiency.

• investment risk.

Division of labor is practiced because

• companies do not want workers to talk to one another.

• it increases efficiency by ensuring that all workers become good at every task.

• it increases efficiency by ensuring that workers become good at specific tasks.

• it prevents specialization.

Dave gets a job at a grocery store, which pays him an hourly wage in exchange for his labor. Dave is participating in

• entrepreneurship.

• human capital.

• the product market.

• the factor market.

Factors of Production

• productive resources needed to produce goods; the four factors are land, capital, labor, and entrepreneurship

• Government, education, infrastructure, and healthcare
• Money, technology, resources, and skills
• Water, air, fire, and earth