Exam 2: The Economic Problem: Scarcity and Choice

Which of the following is NOT true of a market economy?

Comparative advantage refers to the ability to produce at a lower opportunity cost than a competitor.

Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1 -Refer to Table 2.1.To maximize total production,

Suppose you are deciding whether to spend your tax rebate check on a new iPod player or a new digital camera.You are dealing with the concept of

An example of an investment 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

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

Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1 -Refer to Table 2.1.For Krystal,the opportunity cost of writing one TV commercial is

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

Price is the coordinating mechanism in a planned economy.

Refer to the information provided in Figure 2.5 below to answer the questions that follow. Figure 2.5 -Refer to Figure 2.5.The economy is currently at Point A.The opportunity cost of moving from Point A to Point B is the

In a free market system,the amount of output that any one household gets depends on its

An improvement in technology will cause the

Refer to the information provided in Figure 2.4 below to answer the questions that follow. Figure 2.4 -Refer to Figure 2.4.The economy moves from Point A to Point D.This could be explained by

An economy produces capital goods and consumer goods.This economy is operating at a point on its production possibility frontier associated with a small amount of capital goods and a large amount of consumer goods.This is most likely to be a

The government produces only what the market is willing to pay for.

In terms of the production possibility frontier,an increase in productivity attributable to new technology would best be shown by

Refer to the information provided in Figure 2.4 below to answer the questions that follow. Figure 2.4 -According to Figure 2.4,which point cannot be produced with the current state of technology?

As you move down the production possibility frontier,the absolute value of the marginal rate of transformation

Refer to the information provided in Figure 2.4 below to answer the questions that follow. Figure 2.4 -According to Figure 2.4,a decrease in unemployment may be represented by the movement from