Exam 2: The Economic Problem: Scarcity and Choice

When two people trade, one must lose for the other to win.

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 best point for society would be

Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the questions that follow. Figure 2.1 -Refer to Figure 2.1. If Macroland's economy is at Point A, it could produce more capital goods

According to the theory of comparative advantage, ________ raise(s) productivity by lowering opportunity costs.

Comparative advantage refers to the ability to produce goods at a lower opportunity cost, and therefore more efficiently, than a competitor.

A society's production possibility frontier is bowed in from the origin due to specialized resources.

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?

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

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

In economics, the term "investment" refers to the purchase of stocks and bonds.

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 Panel

The production possibility frontier is used to illustrate the concept of

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

In a ________ economy, the behavior of buyers and sellers determines what gets produced, how it is produced, and who gets it.

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 B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars

Refer to the information provided in Figure 2.1 below for the economy of Macroland 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 Figure 2.6 below to answer the questions that follow. Figure 2.6 -Refer to Figure 2.6. Economic growth is represented by a

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

Refer to the information provided in Figure 2.6 below to answer the questions that follow. Figure 2.6 -Refer to Figure 2.6. A shift from ppf¹ to ppf^{2 may be caused by}

A society can produce two goods: green tea and vitamin water. As this society moves down its production possibility frontier, producing more and more units of vitamin water, the opportunity cost of producing vitamin water increases. The society's production possibilities frontier will be