Exam 2: Choice in a World of Scarcity

The economics approach portrays people as self-interested. Instead, the critics argue that people should be taught to care more deeply about others. Economists offer several answers to this concern. Offer two economist responses with explanation.

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Question 1

Correct Answer:

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Philosophers draw a distinction between positive statements, which describe the
world as it is, and normative statements, which describe how the world should be. In the study of
economics, positive and normative arguments often blend into each other. Second, selfinterested behavior and profit-seeking can be labeled with other names, such as personal choice
and freedom. Third, self-interested behavior can lead to positive social results. For example,
when people work hard to make a living, they create economic output. Fourth, even people who
focus on their own self-interest in the economic part of their life often set aside their own narrow
self-interest in other parts of life

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.

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(Multiple Choice)

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Question 2

Correct Answer:

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Which of the following would most likely shift the production possibilities curve inward?

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

(Multiple Choice)

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Question 4

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

(Multiple Choice)

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Question 5

Scarcity exists because of:

(Multiple Choice)

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Question 6

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

(Multiple Choice)

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Question 7

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible.

(Multiple Choice)

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Question 8

When economists analyze how individuals make choices, they divide the decision process into two steps. Define these two steps and label the resultant model.

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Question 9

The opportunity cost of attending university is likely to include all except which of the following?

(Multiple Choice)

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Question 10

Why is there scarcity?

(Multiple Choice)

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Question 11

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be.

(Multiple Choice)

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Question 12

In many cases, it is reasonable to refer to the ________________ as the price.

(Multiple Choice)

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Question 13

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.

(Multiple Choice)

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Question 14

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible.

(Multiple Choice)

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Question 15

The leader of a federal political party made the following campaign promise: "My administration will increase national defense without requiring sacrifices elsewhere in the economy." The promise can be kept if:

(Multiple Choice)

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Question 16

As a person receives more of a good, the _______________ from each additional unit of the good declines.

(Multiple Choice)

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Question 17

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

(Multiple Choice)

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Question 18

Scarcity implies that:

(Multiple Choice)

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Question 19

The marginal benefit of a slice of pizza is the:

(Multiple Choice)

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Question 20

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The economics approach portrays people as self-interested. Instead, the critics argue that people should be taught to care more deeply about others. Economists offer several answers to this concern. Offer two economist responses with explanation.

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices.

Which of the following would most likely shift the production possibilities curve inward?

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good.

Scarcity exists because of:

The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the _________________, sometimes also called the opportunity set, a diagram which shows what choices are possible.

When economists analyze how individuals make choices, they divide the decision process into two steps. Define these two steps and label the resultant model.

The opportunity cost of attending university is likely to include all except which of the following?

Why is there scarcity?

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be.

In many cases, it is reasonable to refer to the ________________ as the price.

The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.

The model that economists use for illustrating the process of individual choice in a situation of scarcity is the budget constraint, sometimes also called the _______________, a diagram which shows what choices are possible.

The leader of a federal political party made the following campaign promise: "My administration will increase national defense without requiring sacrifices elsewhere in the economy." The promise can be kept if:

As a person receives more of a good, the _______________ from each additional unit of the good declines.

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is:

Scarcity implies that:

The marginal benefit of a slice of pizza is the:

Welcome to Economics

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