Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Why might the money price for something be higher than the opportunity cost? Why might it be lower? Give an example of each to illustrate your answer.

If a society uses the market system, only markets are available to solve all of its problems.

The opportunity cost of increased production of some good can be measured with

Which of the following is not an example of a type of factor of production?

A normal production possibilities frontier has a

Scarcity is a concept that does not apply to

A recent study found that it was cheaper to buy a chicken dinner from Kentucky Fried Chicken than it was to prepare it at home.The researcher included all costs including the imputed value of time involved to prepare the meal at home.This study illustrates the

As a strategy to boost enrollment, in January 1996, a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located.For students who accepted the offer, how did this offer affect the opportunity cost of attending college?

Adam Smith believed that markets coordinated the self-interests of consumers.

The production possibilities frontier slopes downward and to the right because of limited resources.

The money cost of a particular good will approximate its opportunity cost if

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

If the production possibilities frontier for two goods is shown as a straight line, this implies that

Trade-offs can always be considered in terms of opportunity costs.

Adam Smith and David Ricardo worked together to develop the law of comparative advantage.

Opportunity cost can always be measured in money terms.

A typical economy produces thousands of different goods.Is it accurate to say that society faces a production possibilities frontier?

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

If the production possibilities curve is a straight line,

Opportunity cost cannot be measured in money terms, only in conceptual terms.