Exam 2: Confronting Scarcity: Choices in Production

Use the following to answer questions Exhibit: Guns and Butter -(Exhibit: Guns and Butter) If the economy were producing 8 units of guns and 12 units of butter per period:

An economy that has the lowest cost for producing a particular good is said to have a(n) :

Use the following to answer questions Exhibit: Bicycles and Radishes 1 -(Exhibit: Bicycles and Radishes 1) The exhibit shows production possibilities curves for two countries that produce only radishes and bicycles.The axes of both graphs are measured in equivalent units.Country A is now operating at point M, and Country B is now operating at point N.Suppose Country A discovered a new technology that greatly increased its ability to produce bicycles.This would:

If an economy is producing a level of output that is on its production possibilities curve, the economy

A production possibilities curve measures opportunity cost in dollar terms.

The North Korean economy is currently classified as:

A production possibilities curve measures cost in terms of dollars spent, not in terms of sacrificed alternatives.

Use the following to answer questions Exhibit: Strawberries and Submarines -(Exhibit: Strawberries and Submarines) Suppose the economy is now operating at point G.This implies that:

Use the following to answer questions Exhibit: Production Possibilities Curve-Military and Civilian Goods -(Exhibit: Production Possibilities Curve-Military and Civilian Goods) A movement from point G to H on Curve 1 would:

Use the following to answer questions Exhibit: Production Possibilities Schedule 1 -(Exhibit: Production Possibilities Schedule 1) If the economy produces 2 units of consumer goods per period, it also can produce at most _______ units of capital goods per period.

If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced, then its production possibilities curve is:

If a production possibilities curve were bowed in or convex to the origin of a graph, it would demonstrate:

Inefficient production or unemployment exists when the economy is ________ the production possibilities curve.

Use the following to answer questions Exhibit: Guns and Butter -(Exhibit: Guns and Butter) Points A, B, E, and F:

If an economy is operating efficiently and with full employment, the production of more of one commodity will necessarily lead to less of something else being produced because of:

Increasing the level of education in the United States will:

Trade can be beneficial to an economy because:

Capital, labor, and natural resources combine to produce goods and services.Which of the following will not lead to an increase in the ability of an economy to produce goods and services?

Technological improvements will:

Use the following to answer questions Exhibit: Production Possibilities Curve -(Exhibit: Production Possibilities Curve 1) If the economy is currently facing production possibilities Curve x, it is more likely to achieve Curve z in the future if it allocates resources to produce at point: