Exam 2: The Economic Problem: Scarcity and Choice

Because resources are not equally well suited to producing all goods,

If an economy is fully utilizing its resources, it can produce more of one product only if it

Price is the coordinating mechanism in a planned economy.

If someone can produce a good at a lower opportunity cost, she ________ in producing that good.

The value of the slope of a society's production possibility frontier is called its

If someone has a comparative advantage in growing pineapples,

Which of the following statements is true?

When two people trade,

The freedom of individuals to start and operate private business in search of profits is known as

The idea that consumers determine what is produced in the economy through their demands is known as

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

Assume a society can produce either beer or wine. If the marginal rate of transformation of gallons of beer into gallons of wine is 0.5, then the opportunity cost of beer is

The inputs into the process of production are called factors of production.

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 ppf^{2, a change in consumer taste would be shown by a}

Manufacturers produce only what the market is willing to pay for.

Related to the Economics in Practice on page 35: In the survey conducted by Esther Duflo and Abhijit Banerjee, the extremely poor were found to consume ________ of their budgets on food compared to people in the United States.

An example of an investment is

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

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 ppf^{1, a change in consumer preferences would be shown by a}

Which of the following statements is true for a command economy?