Exam 3: The Fundamental Economic Problem: Scarcity and Choice

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.

Which of the following quotations best captures the idea of opportunity cost?

Although finished goods are scarce, the inputs to produce them are not scarce.

Because resources tend to be specialized, increased production of military goods tends to

The production possibilities curve illustrates the basic principle that

What mechanism assures that firms produce outputs that consumers actually desire?

Figure 3-1 -The shape of the production possibilities frontier in Figure 3-1 implies that

If production involves constant opportunity cost, the production possibilities curve

Which of the following is a listing of the types or categories of resources?

The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.

How are the slope of a production possibilities frontier and the opportunity cost of the goods related?

The fundamental goal of economics is to

Scarcity of resources implies that people must make decisions consistent with the means they have available to them.

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

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

Millionaires do not face the problem of scarcity.

Free markets further all of society's goals.​

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

If an economy wants to experience economic growth, what decision must it make and carry out? Explain.

A recent study found that it was cheaper to buy a chicken dinner from Kentucky Fried Chicken than it was to prepare it at home.The researcher included all costs including the imputed value of time involved to prepare the meal at home.This study illustrates the