Exam 2: Some Tools of the Economist

Abigail wishes to spend more time this week studying for her classes. Using the idea of a production possibilities curve, and assuming Abigail is currently spending all of her time efficiently, Abigail can spend more time studying this week only if

Three basic decisions must be made by all economies. What are they?

Middlemen are individuals who

If an economy uses its resources inefficiently, this situation would be illustrated on a production possibilities diagram as

Use the production possibilities data below to answer the following question(s). Table 2-3 -Refer to Table 2-3. The farmer and the rancher both could benefit if the farmer were to specialize in

When private ownership of a resource is clearly defined and enforced, the private owner

When collective decision making is utilized to resolve economic questions regarding the allocation of resources,

High transaction costs will tend to

Use the production possibilities data below to answer the following question(s). Table 2-3 -Refer to Table 2-3. The opportunity cost of 1 pound of meat for the rancher is

A department store buys a wool coat for $120 and sets its retail price at $300. The coat costs $85 to produce. When the coat doesn't sell, the store marks the price down to $200, then $100, and finally $70. At $70, Amy buys the coat. What was the coat's true value? Why?

Even countries that depend primarily on market forces to resolve the basic economic questions will usually rely on the collective decision-making process to

Other things constant, which of the following would you expect to increase the output growth rate of a country?

Figure 2-7 -If an economy operates at point A on the production possibilities curve shown in Figure 2-7,

If the resources of an economy are being used inefficiently, it would be

The economic principle that states that individuals or nations can gain by specializing in the production of goods that they produce cheaply and exchanging for other desired goods that they could only produce at a higher cost is

According to the law of comparative advantage,

A production possibilities curve indicates that when resources are being used efficiently,

In an informed and voluntary exchange,

As the baby boom generation, born during 1946 through 1960, reaches retirement age during the 2011 through 2030 period, the number of workers per Social Security beneficiary is expected to

Noah values his car at $10,000, and Emily values it at $14,000. If Emily buys it from Noah for $11,000, which of the following is true?