Multiple Questions Answers

1. Whatever must be given up to obtain something is called:
Externality
Comparative Advantage
Opportunity Cost
Specialization

2. The price of gasoline has more than doubled in the past couple years. Which graph applies to this story?
Graph A
Graph B
Graph C
Graph D

3. To develop economic models, economists make assumptions. The purpose of this is: To include as many aspects of reality as possible
To develop a universal macroeconomic theory
To simplify reality, so the models can help us see the most important aspects.
None of the above

4. The ability to produce a good at a lower opportunity cost than another producer is called:
Substitution effect
Externality
Comparative Advantage
Absolute Advantage