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

Because resources are scarce,the opportunity cost of investment in capital is

An example of forgoing present benefits in order to receive future benefits is

If the unemployment rate increases from 10% to 14%,the economy will

In economics,investment always refers to

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

Production inefficiency occurs

Refer to the information provided in Figure 2.6 below to answer the questions that follow. Figure 2.6 -Refer to Figure 2.6.An improvement in technology may be represented by a

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 hybrid cars are produced is

Capital,as economists use the term,

If the opportunity costs of producing a good increase as more of that good is produced,the economy's production possibility frontier will be

In economics,the term capital refers only to some form of money.

The process of using resources to produce new capital 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

A laissez-faire economy is one in which individual people and firms pursue their own self-interest without any central direction or regulation.

Which of the following does NOT constitute an act of "investment" as economists use the term?

Refer to the information provided in Figure 2.2 below to answer the questions that follow. Figure 2.2 -Refer to Figure 2.2.Microland is currently operating at Point B.You correctly deduce that

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 optimal point for the economy is

Things that have already been produced that are in turn used to produce other goods and services over time are called "capital."

Advocates of an unregulated market system argue that