Exam 2: Scarcity and the World of Trade-Offs

The principle of comparative advantage implies that

Which of the following is the LEAST scarce?

The opportunity cost of a decision is the

If a country is currently producing inside its production possibilities curve,

-Refer to the above figure. If the farmer is producing 4,000 bushels of beans and 38,000 bushels of wheat, then we know the farmer

In constructing a production possibilities curve, all of the following are assumed EXCEPT

Typically, the greater the specialization of resources,

It is correct to state that a society which is on its production possibilities curve is

-In the above figure, as more ukuleles are produced, the opportunity cost in terms of guitars is

-Refer to the above figure. Given our current level of technology and resources, the unobtainable point(s)of production would be

Whenever a society forgoes current consumption to invest in capital goods,

Which of the following is a true statement?

Distinguish the concepts of comparative advantage and absolute advantage.

All points inside the production possibilities curve indicate

All of the following are resources EXCEPT

The law of increasing additional costs is due to

Naturally occurring diamonds are an example of

Tiger Woods, a professional golfer, pays a garage mechanic to change the motor oil of his car even though he can do the work himself. Which of the following best explains why Tiger Woods does not change the oil himself?

In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused

In economics, the term physical capital