Exam 1: Introduction to Key Ideas

A mixed economy is best described by the statement:

A production possibilities curve of an economy is a graphical representation of the various combinations of output that are wanted by the citizens of the economy.

Meredith had only $10 to spend last weekend. She was, at first, uncertain whether to go to see a new movie or to rent two videos she has been told were good. In the end she rented the videos. Which of the following statements is correct?

-A movement from point B to point C along the production possibilities frontier in Figure 1.1 suggests:

The production possibility frontier (PPF) shows, for each output of one good, ________________ of the other good that can be produced.

Trade has had primarily an impoverishing impact in the modern world.

Along a given production possibility curve, different combinations of goods can be produced with different technologies.

At the very least, Joe Average and Bill Gates are both identically limited by:

-Use the production possibilities described in Table 1.1, the cost of each additional film in terms of food:

Which of the following statements is correct for a society that emphasizes the production of capital goods over consumer goods?

It is always correct to allow markets to solve economic problems.

-The combination of food and films shown by point H in Figure 1.1:

-In Table 1.1 the opportunity cost of increasing food output from 17 to 22 is:

All of the following statements describe a macroeconomic topic except: