Exam 3: The Fundamental Economic Problem Scarcity and Choice

Economics examines the options open to households,business firms,governments,and entire societies by the limited resources at their command.

Any point on or outside the PPF is attainable.

As a general rule,an increase in the capital available to a society

While specialization and exchange were very important to Adam Smith in 1776,they have largely lost their importance in the 21st century.

The divergence between money costs and opportunity costs is the least in which of the following situations?

Since it spent over $3.6 trillion in 2010,opportunity cost was not an issue for the U.S.government.

The first economist to point out the importance of specialization of labor was

Which of the following is an example of opportunity cost not measured by money cost?

What is Jim's opportunity cost of operating his own business?

Why is it inefficient for an economy to be inside the production possibilities frontier?

When a firm or economy is operating efficiently,it is operating

Which of the following events create an outward shift of the production possibilities curve?

The law of comparative advantage explains why

The total amount of consumption of a society can be increased if

Society can produce at a point outside the production possibilities frontier,but only if it is using all of its resources efficiently.

Do all valuable items have price tags?

Although all points on the PPF are efficient,that alone does not tell us which point is "best" for the society.

Resources are used to create goods and services.

Economics is the study of the logic of

A market society will always protect the natural environment.