Exam 3: The Fundamental Economic Problem: Scarcity and Choice

If production involves constant opportunity cost, the production possibilities curve

The concept of opportunity cost is more applicable to society as a whole than it is for an individual household.

In a market system, the major coordination tasks are carried out

If the PPF for guns and butter is bowed outward from the origin, this indicates constant opportunity cost between the two goods.

Economists use the term capital to describe that factor of production that includes human-made resources such as factories, buildings, machinery and tools.

Do all valuable items have price tags?

Hutch Technology makes computer monitors, which sell for $100 each.What is the opportunity cost of ten monitors?

All actions and purchases, even those of wealthy people, involve a sacrifice.

How are the slope of a production possibilities frontier and the opportunity cost of the goods related?

Figure 3-4 -In Figure 3-4, for which of the following would this statement be true: "To get more apples we have to give up wheat." A movement from

A normal production possibilities frontier has a

Every economic decision involves a trade-off because of

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

Which of the following is a good example of efficient specialization and voluntary exchange?

Centrally planned economies are not constrained by the problem of scarcity.

Although all points on the PPF are efficient, that alone does not tell us which point is "best" for the society.

Although specialization of labor increases efficiency of production, it can lead to another major problem:

If an economy is operating inefficiently, then

A production possibilities curve has a downward slope because

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