Consider two countries (France and the United States) that use labor as an input to produce two goods: wine and cloth. In France, one hour of a worker’s labor can produce either 5 units of cloth or 10 units of wine. In the US, one hour of a worker’s labor can produce either 20 units of cloth or 20 units of wine. The information provided is illustrated as follows:   Cloth Wine France 5 10 The United States 20 20   Which of these countries enjoys an absolute advantage in the production of cloth and wine?

________ is a graphical representation of the maximum quantity of goods and services that can be produced using limited resources to the fullest extent possible.

________ enables countries to acquire more than they can produce on their own

Figure 1.3In Figure 1.3, underutilization of resources is represented by point

Which statement concerning opportunity costs is false?

In economics, physical capital includes

People

Prices of inputs and outputs are set by the government in a _____ economic system.

All human activity related to the productive process is known as

The heart of the economic problem is to