Exam 3: The Fundamental Economic Problem: Scarcity and Choice

All of the points inside a production possibilities frontier are ____; all of the points outside the production possibilities frontier are ____.

In a properly functioning economy, money costs approximate opportunity costs.

Monetary costs and opportunity costs are always identical.

Opportunity cost can best be defined as the

If it is not possible to increase the output of one good without decreasing the output of the other, when there are only two goods, then

A ticket to an Eric Clapton concert costs $45.If you have a ticket, you can "scalp" it (sell it illegally) for $75.To a ticket holder, the opportunity cost of actually attending the concert is

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

If the U.S.government decides to increase military spending, a possible opportunity cost could be lower spending on education.

Scarcity is the fundamental problem of the economy.

Scarcity is a concept that applies to all of the following except

Economic growth solves the problem of scarcity.

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

In a market economy, government decides the answers to the three economic decisions.

The idea of opportunity cost is relevant

Some economies have production possibilities frontiers that are bowed inward toward the origin.

Mick Jagger, a former student at the London School of Economics, once sang, "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

Table 3-2 ​ -If the producer is at combination B as shown in Table 3-2, the opportunity cost of increasing corn production by 1 unit is

Opportunity cost is best defined as the value of

The central question in economics is how to

Why is it inefficient for an economy to be inside the production possibilities frontier?