Exam 26: Scarcity and Choice Neoclassical View

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Explain why and how changes in technology, resources, and institutions influence the PPC. -What would cause a parallel shift in a PPC? What would cause a change in its slope?

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Question 1

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A parallel shift in a PPC reflects an equal increase in resources used in the production of both goods A change in slope would result from a greater gain in the resources used for the production of one good compared to the second good

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective. -Why is the context in which individuals make decisions important? How do social and cultural norms play into how individuals make decisions? Give an example of how a social norm may influence an economic decision.

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Few decisions are made in isolation People often make decisions based on reasons other than self-interest, and sometimes these choices are made without carefully weighing the costs and benefits of a decision

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective. -What is the progressive criticism of the analysis of the economy, starting with isolated individuals? What is the critique of the assumptions about individuals and how individuals make decisions? What is the progressive alternative?

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The assumption of isolated individuals does not describe life in a highly complex society in which every individual is tied to other individuals within the context of social and cultural norms, laws, and relationships

Describe how the production possibilities curve captures production choices in a society. -If a society is producing on the frontier, what happens if society decides it wants more of one of the goods being produced?

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Question 4

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -What does it mean when PPCs are illustrated with a straight line?

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Question 5

Which of the following would fall into the category of "resources?"

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Question 6

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective. -A progressive economist would claim we should not assume a market economy is always producing on the PPC. Explain. What does this mean about the decision to produce additional amounts of one good? Both goods?

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Question 7

Explain why and how changes in technology, resources, and institutions influence the PPC. -What kind of institutional changes could cause an increase in production even though no other inputs increased and no technology changed?

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Question 8

List the assumptions behind the PPC -What do we assume about inputs, institutions, and technology in building the PPC?

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Question 9

-In Diagram 26.1a, Point Y represents

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Question 10

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -Why are typical textbook PPCs bowed outward?

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Question 11

Whats defention of terms: -trade-offs

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Question 12

What is the definition of opportunity cost?

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Question 13

Whats defention of terms: -comparative Advantage

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Question 14

Explain why and how changes in technology, resources, and institutions influence the PPC. -Give an example of how a change in technology might have an effect on the production of one good and not the other, and illustrate this situation with a PPC. What changed in the graph?

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Question 15

List the assumptions behind the PPC -What does marginal cost mean? Create an example of a marginal cost.

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Question 16

Describe how the production possibilities curve captures production choices in a society. -What does it mean if a society is producing on the frontier or directly on the PPC?

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Question 17

-The shift in the production possibilities curve shown in Diagram 26.1c reflects

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Question 18

What is the attitude of neoclassical economists toward scarcity?

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Question 19

What do progressive economists mean by the term, "institutions?"

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Question 20

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Exam 26: Scarcity and Choice Neoclassical View

Explain why and how changes in technology, resources, and institutions influence the PPC. -What would cause a parallel shift in a PPC? What would cause a change in its slope?

Describe how the production possibilities curve captures production choices in a society. -If a society is producing on the frontier, what happens if society decides it wants more of one of the goods being produced?

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -What does it mean when PPCs are illustrated with a straight line?

Which of the following would fall into the category of "resources?"

Explain why and how changes in technology, resources, and institutions influence the PPC. -What kind of institutional changes could cause an increase in production even though no other inputs increased and no technology changed?

List the assumptions behind the PPC -What do we assume about inputs, institutions, and technology in building the PPC?

-In Diagram 26.1a, Point Y represents

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -Why are typical textbook PPCs bowed outward?

Whats defention of terms: -trade-offs

What is the definition of opportunity cost?

Whats defention of terms: -comparative Advantage

Explain why and how changes in technology, resources, and institutions influence the PPC. -Give an example of how a change in technology might have an effect on the production of one good and not the other, and illustrate this situation with a PPC. What changed in the graph?

List the assumptions behind the PPC -What does marginal cost mean? Create an example of a marginal cost.

Describe how the production possibilities curve captures production choices in a society. -What does it mean if a society is producing on the frontier or directly on the PPC?

-The shift in the production possibilities curve shown in Diagram 26.1c reflects

What is the attitude of neoclassical economists toward scarcity?

What do progressive economists mean by the term, "institutions?"

Prehistoric Communal Institutions in the Middle East

Communal Equality to Slavery in the Middle East

Slavery to Feudalism in Western Europe

Feudalism and Paternalism in England

Feudalism to Capitalism in England

Mercantilism in England

Pre-Capitalism to Industrial Capitalism in the United States 1776-1865

Classical Liberalism Defense of Industrial Capitalism

Socialist Protest Against Industrial Capitalism

Marx Critique and Alternative to Capitalism

Rise of Corporate Capitalism in the United States, 1865-1900

Neoclassical Economics Defense of Corporate Capitalism

Veblen Critique of Corporate Capitalism

Growth and Depression in the United States, 1900-1940

Keynesian Economics and the Great Depression

The United States and Global Capitalism, 1940-2006

Robinson Crusoe Two Perspectives on Microeconomics

The Two Americas Inequality, Class, and Conflict

Inequality, Exploitation, and Economic Institutions

Prices, Profits, and Exploitation

Market Power and Global Corporations

Economics of Racial and Gender Discrimination

Environmental Devastation

Government and Inequality

Economic Democracy

Simple Analytics of Supply and Demand

Consumption Theory: Demand

Production Theory Supply

Costs of Production

Work and Wages Neoclassical View of Income Distribution

Prices and Profits in Perfect Competition

Monopoly, Power, Prices, and Profits

Monopolistic Competition and Oligopoly

Market Failures Public Goods, Market Power, and Externalities

History of Business Cycles and Human Misery

National Income Accounting How to Map the Circulation of Money and Goods

Money and Profit Says Law and Institutionalist Criticism

Neoclassical View of Aggregate Supply and Demand

Keynesian View of Aggregate Supply and Demand

How to Measure Instability

Consumer Spending and Labor Income

Investment Spending and Profit

The Multiplier

Business Cycles and Unemployment

Growth and Waste

Fiscal Policy

Government Spending and Taxes

Money, Banking, and Credit

Inflation

Monetary Policy

Exports and Imports

International Trade, Investment, and Finance How Instability Spreads Around the World

Debate on Globalization

Debate on Free Trade

Development

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