Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Figure 3-2 -In Figure 3-2, at point B

Figure 3-2 -In Figure 3-2, a point such as E

Efficient production can be carried out anywhere on or beyond the production possibilities frontier.

The law of comparative advantage implies that a doctor who is also a talented auto mechanic should

A production possibilities curve always slopes downward to the right because resources

Do all valuable items have price tags?

While specialization and exchange were very important to Adam Smith in 1776, they have largely lost their importance in the 21st century.

The workers in Adam Smith's famous pin factory, who were proficient in pin production, faced the problem of

If good "A" is represented on the horizontal axis and good "B" on the vertical axis, then the steeper the production possibilities frontier at a given level of production of good "A," the

Efficiency is defined as minimizing waste.

Because of scarcity, every economic decision involves

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then his or her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

If an economy is producing inefficiently, it is

Which of the following is likely to affect the position and shape of society's production possibilities frontier?

In a market system, ____ distributes goods among consumers in accord with their tastes and preferences, using voluntary exchange to determine who gets what.

Goods are distributed among people by means of

Economics is generally concerned with

What mechanism assures that firms produce outputs that consumers actually desire?

If a market system is functioning well, we can conclude that goods with

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