Exam 3: The Fundamental Economic Problem: Scarcity and Choice

President Barack Obama pushed forward a national health care plan to increase the availability of medical care for all Americans. How would one determine the opportunity cost of the proposal?

Scarcity of resources implies that people must make decisions consistent with the means they have available to them.

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

An optimal decision is one that is selected based on an analysis of

In a well-functioning market, high opportunity costs will be reflected in high monetary costs.

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

Is faster economic growth unambiguously better?

Some environmentalists argue that the scarcity of physical resources such as fuel means that

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

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

The principle of comparative advantage helps explain trade between nations.

If an economy is operating inefficiently, then

The tendency of opportunity cost to increase as production increases

Inefficiency in an economy can be caused by

One role that markets play is

In Figure 3-2, a point such as E

Figure 3-2 In Figure 3-2, the production possibilities frontier has a bowed-out shape because of the law of

Voluntary exchange results in mutual gains.

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

Which of the following observations is true?