Exam 3: The Fundamental Economic Problem: Scarcity and Choice

If two persons trade, one must gain at the expense of the other.

A point lying inside (under) a production possibilities curve indicates that

The division of labor usually refers to splitting

The market system provides a way

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

Figure 3-2 -In Figure 3-2, a point such as D

Which of the following is not an example of a type of factor of production?

Economists define efficiency as

A well-functioning market will have high monetary costs applied to high opportunity costs.

"OPEC is exploiting the United States by selling us oil at inflated prices." Agree or disagree.

Probably the most important source of efficiency in production is

Which of the following ideas of Adam Smith has religious overtones?

The most important way in which inefficiency occurs is

Inefficiency in an economy can be caused by

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

Table 3-2 A 12 16 B 17 15 C 21 13 D 23 9 E 24 5 -From the data given in Table 3-2, the opportunity cost of increased cotton in moving from A to B is

Which of the following quotations best captures the idea of opportunity cost?

Being on the PPF implies that increasing the production of one good or service can only be accomplished by decreasing the quantity produced of another good or service.

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

A market system is not considered an effective way of controlling self-interest.