Exam 2: The Economic Problem: Scarcity and Choice

Refer to the information provided in Figure 2.3 below to answer the question(s) that follow. Figure 2.3 -Refer to Figure 2.3. Assume that in this society the opportunity cost of sailboats in terms of surfboards is increasing. A graph of this society's production possibility frontier will be represented by Panel

A bowed-out production possibility frontier represents decreasing opportunity costs.

Which of the following is a resource as the term is used by economists?

Some economists advocate government intervention in a market economy

The gap between rich and poor countries

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4 -Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by

Someone has a comparative advantage in producing a good if she can produce that good

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4 -According to Figure 2.4, which point cannot be produced with the current state of technology?

Economic growth may occur when

Related to the Economics in Practice on p. 36: In all societies, resources are limited relative to people's demands, and there are ________ trade-offs individuals face in rich countries versus poor countries.

If the unemployment rate decreases from 9% to 6%, the economy will

Consumer sovereignty

Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4 -According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars

From 1935 to 2017, the yield per acre for corn has ________ in the United States.

In which system are decisions made by thousands of people who have information about resources, production technology and consumer desires?

Refer to the information provided in Figure 2.5 below to answer the question(s) that follow. Figure 2.5 -Refer to Figure 2.5. The best point for society would be

An increase in the stock of capital will cause the

Manufacturers produce only what the market is willing to pay for.

According to the theory of comparative advantage, specialization and free trade will benefit

In a market system, self-interest motivates most people to