Exam 3: The Fundamental Economic Problem Scarcity and Choice

The production possibilities frontier slopes downward and to the right because of limited resources.

The production possibilities frontier for a country is usually drawn

Economics studies the logic of choices made from among available possibilities.

Figure 3-6 -In Figure 3-6 assume this economy is currently operating at point D.What is the opportunity cost of moving to B?

How does scarcity affect the range of possible choices that decision makers face?

According to the principle of increasing costs,as the production of one good expands,the opportunity cost of producing another unit of the good tends to increase.

If production involves increasing opportunity cost,then moving nearer the horizontal axis will increase the opportunity cost of

Figure 3-3 -In Figure 3-3,a shift from A to B seems most consistent with which of the following?

A production possibilities curve has a downward slope because

The production possibilities frontier has a tendency to bow outward from the origin.

President Barack Obama pushed forward a national health care plan to increase the availability of medical care for all Americans.How would one determine the opportunity cost of the proposal?

Adam Smith's book,one of the first systematic treatments of economics,was entitled

A society's decision to produce more tanks may require it to forgo production of some cars.

Figure 3-4 -Which of the following would make point Q in Figure 3-4 attainable?

Which of the following ideas of Adam Smith has religious overtones?

During World War II,Hitler would often order his army to hold a particular town or river "at all costs." Was this rational? If so,explain.If not,indicate which economic idea it violated.

In order to make an optimal choice we must use

Scarcity is a concept that applies to all of the following except

If an economy is operating inefficiently,then

Because resources tend to be specialized,increased production of military goods tends to