Exam 3: The Fundamental Economic Problem: Scarcity and Choice

A normal production possibilities frontier has a

In an economy, unemployment exists only at points that are on the interior of the production possibilities frontier.

An economist claims that any point not on a production possibilities frontier cannot be best. What is his reasoning to support this?

If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?

When a firm or economy is operating efficiently, it is operating

According to Baumol, Blinder, and Solow, recognition of the usefulness of markets

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

Figure 3-4 -In Figure 3-4, for which of the following would this statement be true: "To get more apples we have to give up wheat." A movement from

Economists define efficiency as

Society can produce at a point outside the production possibilities frontier, but only if it is using all of its resources efficiently.