Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Figure 3-1 -The shape of the production possibilities frontier in Figure 3-1 implies that

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

Since it spent over $3.6 trillion in 2010, opportunity cost was not an issue for the U.S.government.

According to the law of comparative advantage, a doctor who is also a talented auto mechanic should

Increasing opportunity cost tends to occur if

Economic growth solves the problem of scarcity.

As a general rule, an increase in the capital available to a society

If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?

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

As the term "opportunity cost" is defined in the text, the opportunity cost of going to college includes

What is the basic task that economists expect the market to carry out?

Which of the following must cope with scarcity?

You have invested $1,000 in a stock whose price is increasing at 10 percent a year.Your stock broker, who is never wrong, recommends a stock rising at 20 percent a year.Assuming the broker earns 4 percent of the stock's value on any purchase or sale of the stock, should you take her recommendation?

According to Baumol and Blinder, recognition of the usefulness of markets

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

If the production possibilities curve is a straight line,

Both conservatives and liberals tend to approve of markets because

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

Generally, the opportunity cost and the money cost of a good

The fundamental goal of economics is to