Econ 102 Practice TestDefine the following termsResource-Scarcity-Opportunity cost-Trade off-Incentive-Specialization-Equilibrium-Efficency-Equity-Model-Ceteris Paribus-Production Possibilities Frontier-Factors of Production-Gains from Trade-Short AnswerWhat are the four basic principals behind individual choices?What is the fundamental principal behind incentives?What are the 5 principals that underlie the interaction of individual choices?Why do markets fail?What is the 1st Principal of Economics?What is the difference between absolute and comparative advantage?Work out the following problemsThe U.S. has 100,000 workers. Each of these workers can produce either 10 pounds of butter or 15 guns. Make a production possibilities frontier showing this information.Brazil has 50,000 workers who can produce either 5 pounds of butter or 7 guns. Make a PPF curve showing this.Calculate the opportunity costs of both goods for both countries and state which country has the absolute and comparative advantage in both
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