Exam 3: The Fundamental Economic Problem: Scarcity and Choice

If good "A" is represented on the horizontal axis and good "B" on the vertical axis,then the steeper the production possibilities frontier at a given level of production of good "A," the

"OPEC is exploiting the United States by selling us oil at inflated prices." Agree or disagree.

What is the opportunity cost of economic growth?

Since it is a centrally planned economy,China does not face opportunity costs when economic decisions are made.

Any point on or outside the PPF is attainable.

Economics is often described as a science of constrained choice.How do you justify this argument?

A society must make three sorts of decision: what goods to produce,how to produce them,and how to distribute them.

The market system provides a way

Which of the following is a good example of efficient specialization and voluntary exchange?

Economics is generally concerned with

The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that

If the production possibilities curve is a straight line,

The concept of "an invisible hand" led Adam Smith to believe that

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

Inputs in production processes are called resources.

While specialization and exchange were very important to Adam Smith in 1776,they have largely lost their importance in the 21st century.

The opportunity cost of a college education includes wages lost while enrolled in school.

What is Jim's opportunity cost of operating his own business?

Figure 3-2 -In Figure 3-2,at point B

Economics is the study of the logic of