Question 1

Explain why and how changes in technology, resources, and institutions influence the PPC.
-What would cause a parallel shift in a PPC? What would cause a change in its slope?

Accepted Answer

A parallel shift in a PPC reflects an equal increase in resources used in the production of both goods A change in slope would result from a greater gain in the resources used for the production of one good compared to the second good

Question 2

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective.
-Why is the context in which individuals make decisions important? How do social and cultural norms play into how individuals make decisions? Give an example of how a social norm may influence an economic decision.

Accepted Answer

Few decisions are made in isolation People often make decisions based on reasons other than self-interest, and sometimes these choices are made without carefully weighing the costs and benefits of a decision

Question 3

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective.
-What is the progressive criticism of the analysis of the economy, starting with isolated individuals? What is the critique of the assumptions about individuals and how individuals make decisions? What is the progressive alternative?

Accepted Answer

The assumption of isolated individuals does not describe life in a highly complex society in which every individual is tied to other individuals within the context of social and cultural norms, laws, and relationships

Question 4

Describe how the production possibilities curve captures production choices in a society.
-If a society is producing on the frontier, what happens if society decides it wants more of one of the goods being produced?

Accepted Answer

The answer of Describe how the production possibilities curve captures...

Question 5

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost.
-What does it mean when PPCs are illustrated with a straight line?

Accepted Answer

The answer of Use the PPC to illustrate scarcity, choice,...

Question 6

Which of the following would fall into the category of "resources?"

Accepted Answer

A)   ice cream
B)   lumber
C)   bread
D)   a cell phone

Question 7

Describe what progressive economists see as the primary shortcomings of the neoclassical scarcity perspective.
-A progressive economist would claim we should not assume a market economy is always producing on the PPC. Explain. What does this mean about the decision to produce additional amounts of one good? Both goods?

Accepted Answer

The answer of Describe what progressive economists see as the...

Question 8

Explain why and how changes in technology, resources, and institutions influence the PPC.
-What kind of institutional changes could cause an increase in production even though no other inputs increased and no technology changed?

Accepted Answer

The answer of Explain why and how changes in technology,...

Question 9

List the assumptions behind the PPC
-What do we assume about inputs, institutions, and technology in building the PPC?

Accepted Answer

The answer of List the assumptions behind the PPC
-What do...

Question 10

-In Diagram 26.1a, Point Y represents

Accepted Answer

A)   a production possibility that is not presently attainable.
B)   a production possibility that is attainable and efficient.
C)   a production possibility that is attainable but inefficient.
D)   a increasing opportunity costs.

Question 11

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost.
-Why are typical textbook PPCs bowed outward?

Accepted Answer

The answer of Use the PPC to illustrate scarcity, choice,...

Question 12

Whats defention of terms:
-trade-offs

Accepted Answer

The answer of Whats defention of terms:
-trade-offs...

Question 13

What is the definition of opportunity cost?

Accepted Answer

A)   the costs of expanding your opportunities.
B)   the cost of not taking advantage of your opportunities.
C)   the cost of the best alternative that you choose.
D)   the cost of the best alternative that you do not choose.

Question 14

Whats defention of terms:
-comparative Advantage

Accepted Answer

The answer of Whats defention of terms:
-comparative Advantage...

Question 15

Explain why and how changes in technology, resources, and institutions influence the PPC.
-Give an example of how a change in technology might have an effect on the production of one good and not the other, and illustrate this situation with a PPC. What changed in the graph?

Accepted Answer

The answer of Explain why and how changes in technology,...

Question 16

List the assumptions behind the PPC
-What does marginal cost mean? Create an example of a marginal cost.

Accepted Answer

The answer of List the assumptions behind the PPC
-What does...

Question 17

Describe how the production possibilities curve captures production choices in a society.
-What does it mean if a society is producing on the frontier or directly on the PPC?

Accepted Answer

The answer of Describe how the production possibilities curve captures...

Question 18

-The shift in the production possibilities curve shown in Diagram 26.1c reflects

Accepted Answer

A)   an increase in resources used in the production of both goods.
B)   a decrease in resources used in the production of both goods.
C)   an decrease in resources used in the production of bamboo only.
D)   an decrease in resources used in the production of coconuts only.

Question 19

What is the attitude of neoclassical economists toward scarcity?

Accepted Answer

A)   scarcity results from the unlimited desires of people.
B)   scarcity can be solved by the operation of the free market.
C)   scarcity is the result of speculators trying to drive up prices.
D)   scarcity is a hoax perpetuated by radical environmentalists.

Question 20

What do progressive economists mean by the term, "institutions?"

Accepted Answer

A)   business associations such as the Chamber of Commerce.
B)   international organizations such as the United Nations.
C)   social systems, habits and customs that influence human behavior.
D)   major governmental bodies such as the Congress and the Supreme court.

Exam 26: Scarcity and Choice Neoclassical View

Explain why and how changes in technology, resources, and institutions influence the PPC. -What would cause a parallel shift in a PPC? What would cause a change in its slope?

Describe how the production possibilities curve captures production choices in a society. -If a society is producing on the frontier, what happens if society decides it wants more of one of the goods being produced?

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -What does it mean when PPCs are illustrated with a straight line?

Which of the following would fall into the category of "resources?"

Explain why and how changes in technology, resources, and institutions influence the PPC. -What kind of institutional changes could cause an increase in production even though no other inputs increased and no technology changed?

List the assumptions behind the PPC -What do we assume about inputs, institutions, and technology in building the PPC?

-In Diagram 26.1a, Point Y represents

Use the PPC to illustrate scarcity, choice, constant opportunity costs, and the law of increasing marginal opportunity cost. -Why are typical textbook PPCs bowed outward?

Whats defention of terms: -trade-offs

What is the definition of opportunity cost?

Whats defention of terms: -comparative Advantage

Explain why and how changes in technology, resources, and institutions influence the PPC. -Give an example of how a change in technology might have an effect on the production of one good and not the other, and illustrate this situation with a PPC. What changed in the graph?

List the assumptions behind the PPC -What does marginal cost mean? Create an example of a marginal cost.

Describe how the production possibilities curve captures production choices in a society. -What does it mean if a society is producing on the frontier or directly on the PPC?

-The shift in the production possibilities curve shown in Diagram 26.1c reflects

What is the attitude of neoclassical economists toward scarcity?

What do progressive economists mean by the term, "institutions?"