Exam 2: The Economic Problem

-The above figure illustrates that if this country wishes to move from its current production point (labeled "Current") and have 10 more tons of food, it can do this by producing

Opportunity cost is best defined as

-The above table shows the tons of steel and concrete that can be produced by the United States and France in an hour. From the data in the table,

Which of the following is TRUE regarding markets? I. Economists define a market as a geographic location where trade occurs. II. A market enables buyers and sellers to get information about each other and to buy and sell fro each other. III. Markets coordinate decisions through prices.

-The bowed outward shape of the production possibilities frontier in the above figure indicates that

Harry produces 2 balloon rides and 4 boat rides an hour. Harry could produce more balloon rides but to do so he must produce fewer boat rides. Harry is his production possibilities frontier.

-The table above shows the marginal benefit from pizza and the marginal cost of pizza in cans of soda forgone. If pizzas are produced, the quantity of soda that people are willing to give up to get an additional pizza is more than the quantity of soda that they must give up to get that additional pizza.

At one point along a PPF 40 tons of wheat are produced while 80 tons of rice are produced. At another point along the same PPF, 41 tons of wheat are produced while 70 tons of rice are produced. The opportunity cost of producing a ton of wheat between these points is _ per ton of wheat.

Capital accumulation

A point outside a production possibilities frontier indicates

Individual economic decisions are coordinated by

In one day, Brandon can either plow 10 acres or plant 20 acres. In one day, Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can

-In the figure above, suppose that Mac and Izzie trade and reach point c. Then

The rights of an owner to use and exchange property are

Resource use is allocatively efficient

If the marginal benefit of a good exceeds its marginal cost

As you move downward along a PPF, the opportunity cost of another unit of the good measured along the horizontal axis decreases.

When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved

Ted can study for his economics exam or go to a concert. He decides to study for his economics exam instead of going to the concert. The concert he will miss is Ted's of studying for the exam.

-In the figure above, the marginal cost of the fifth computer is