Exam 3: The Fundamental Economic Problem Scarcity and Choice

The concavity or bowed-out shape of the production possibilities frontier is the result of

What is division of labor? How does it raise efficiency and productivity?

A principle that economists emphasize is that the ____ of decision makers are always limited.

Efficiency is defined as minimizing waste.

If the quantity of one good that must be forgone increases as successive units of another good are produced, then there is said to be increasing opportunity cost between the two goods.

In terms of efficiency, any point on a production possibilities frontier is as good another.

A market system (market economy) depends on the market to

The problem of scarcity

A society must make three sorts of decision: what goods to produce, how to produce them, and how to distribute them.

Money costs and opportunity costs are concepts that are

Figure 3-7 -What is the opportunity cost of moving from point B to point A in Figure 3-7?

Economists define efficiency as

High opportunity costs go hand in hand with high money costs in a properly functioning economy.

Specialization of labor makes sense only if there is some means of exchange.

Which of the following is a listing of the types or categories of resources?

When a firm or economy is operating efficiently, it is operating

A normal production possibilities frontier has a

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

In early 1996, the upper Midwest suffered record cold, with wind chills of fifty degrees below zero or worse.Yet, grocery stores stocked fresh citrus fruit (obviously not grown locally).Why did grocers stock the fruit?

The statement "Resources employed in producing X are better suited to making Y" is another way of saying