Exam 2: The Economic Problem: Scarcity and Choice

Related to the Economics in Practice on p. 35: In the survey conducted by Esther Duflo and Abhijit Banerjee, the extremely poor were found to consume ________ of their budgets on weddings, funerals, and other festivals.

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

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

Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1 -Refer to Table 2.1. Which of the following statements is true?

The principle that the cost of something is equal to what is sacrificed to get it is known as the

A bowed-out production possibility frontier represents decreasing opportunity costs.

Due to a mild winter, Florida experienced a bumper crop of oranges. This would best be represented by a(n)

If an economy's production possibility frontier is negatively sloped and "bowed outward" from the origin, then the opportunity cost of producing a good

Which of the following is an act of economic "investment"?

Which of the following is a resource as the term is used by economists?

An example of an investment is

The economic problem can best be stated as

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

If the unemployment rate decreases from 9% to 6%, the economy will

The process of using resources to produce ________ is known as investment.

Advocates of an unregulated market system argue that

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

All markets involve buyers and sellers engaging in exchange.

If an economy is producing on its production possibility frontier but is not producing what people want, the economy

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 this society's production possibility frontier is represented by Panel C. The opportunity cost of sailboats in terms of surfboards is