Exam 3: The Fundamental Economic Problem Scarcity and Choice

Figure 3-2 -In Figure 3-2,at point B

The statement "Resources employed in producing X are better suited to making Y" is another way of saying resources

The principle of comparative advantage explains specialization and trade among countries but not among individuals.

Millionaires do not face the problem of scarcity.

If production involves decreasing opportunity cost,the production possibilities curve

Figure 3-1 -According to Figure 3-1,the opportunity cost of one more bushel of wheat is

What would be the opportunity cost of a child using a coupon for a free ice cream cone?

Scarcity of resources implies that people must make decisions consistent with the means they have available to them.

Division of labor has caused output to rise dramatically since the industrial revolution.

From a society's viewpoint,when all resources are fully employed,a decision to have more of one thing means we must give up some of another thing.

Figure 3-1 -The shape of the production possibilities frontier in Figure 3-1 implies that

Scarcity is the fundamental problem of the economy.

​Goods are distributed among people by means of:

The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that

If the production possibilities curve is a straight line,

For a given production possibilities frontier,which points are attainable?

Rational decision making must always be based on the concept of opportunity cost.

Individuals face scarcity; whole societies do not.

Monetary costs and opportunity costs are always identical.

If the U.S.government decides to increase military spending,one opportunity cost will be lower spending on education.