Exam 2: The Economic Problem: Scarcity and Choice

Refer to the information provided in Figure 2.3 below to answer the questions that follow. Figure 2.3 -Refer to Figure 2.3. Assume that in this society the marginal rate of transformation of sailboats for surfboards is constant and equal to -10. A graph of this society's production possibility frontier will be represented by

An institution through which buyers and sellers interact and engage in exchange is

Refer to the information provided in Figure 2.5 below to answer the questions that follow. Figure 2.5 -Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 plasma televisions could be produced, production of LCD televisions would have to be reduced by

Price is the coordinating mechanism in a planned economy.

In economics, investment always refers to

Which of the following is an element of a command economy?

A command economy eliminates markets.

Refer to the information provided in Figure 2.1 below to answer the questions that follow. Figure 2.1 -Refer to Figure 2.1. Macroland is currently operating at Point A. The best explanation for this is that

An economy in which a central authority draws up a plan that establishes what will be produced and when, sets production goals, and makes rules for distribution is a

Among the resources used in production are labor and capital.

Related to the Economics in Practice on page 39: The results of the survey conducted by Esther Duflo and Abhijit Banerjee found that in extremely poor societies,

Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1 Krystal Mark Writing Poerns 8 12 Writing TV Comrnercials 2 4 -Refer to Table 2.1. Which of the following statements is true?

Refer to the information provided in Figure 2.6 below to answer the questions that follow. Figure 2.6 -Refer to Figure 2.6. If the economy is at ppf1, a change in consumer preferences would be shown by a

The "economic problem" is that given scarce resources, how do large societies go about answering the basic economic questions of what will be produced, how it will be produced, and who will get it.

For an economy to produce at a point beyond its current ppf, the economy must

The amount that households have accumulated out of past income through saving and inheritance is

If someone has a comparative advantage in growing pineapples,

Refer to the information provided in Figure 2.4 below to answer the questions that follow. Figure 2.4 -According to Figure 2.4, the point where only motorcycles are produced is

A society can produce two goods: donuts and beer. The society's production possibility frontier is negatively sloped and "bowed outward" from the origin. As this society moves down its production possibility frontier, producing more and more units of donuts, the opportunity cost of producing beer

Refer to the information provided in Figure 2.4 below to answer the questions that follow. Figure 2.4 -According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles,