Exam 3: The Fundamental Economic Problem: Scarcity and Choice

A principle that economists emphasize is that the ____ of decision makers are always limited.

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.

-In Figure 3-7, if we compare a move from point B to C with a move from point A to point B, we can see that

If production involves increasing opportunity cost, then on the production possibilities frontier, moving to a point closer to the horizontal axis will increase the opportunity cost of

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

Opportunity cost is best defined as the value of

If the quantity of one good that must be forgone increases as successive units of another good are produced, then there is said to be increasing opportunity cost between the two goods.

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

What are the three coordination tasks that markets resolve?

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

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?

The fact that resources tend to be specialized is one reason the production possibilities frontier is drawn

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

How do economists define efficiency? Elaborate.

A production possibilities frontier has a downward slope because

Figure 3-1 -The production possibilities frontier in Figure 3-1, using a move from point B to point D as an example, shows

Figure 3-5 At present, faculty in the Economics Department teach introductory and upper-level courses. Which graph in Figure 3-5 represents the change in the production possibilities of the Economics Department after a policy of using graduate students in addition to faculty to teach introductory sections was implemented?

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

The statement "Resources employed in producing X are better suited to making Y" is another way of saying

-In Table 3-2, from combination C , the opportunity cost of 2 more units of cotton would be