Exam 2: Scarcity, Trade-Offs, and Production Possibilities

FIGURE 2-1 -Refer to Figure 2-1. Which of the followings statements about payments for goods and services is the most accurate?

FIGURE 2-3 -Refer to Figure 2-3. At which point is it currently not possible to produce?

The opportunity cost of a particular good tends to increase with its rate of output because some resources cannot be easily adapted from the production of one good or service to another.

FIGURE 2-6 -Refer to Figure 2-6. The diagram represents a trade-off in an economy between prison cells and classrooms. Which position represents the choice to allocate the greatest amount of resources to producing classrooms?

Which one of the following will NOT cause the production possibilities curve to shift outward?

Which of the following will shift the production possibilities curve outward?

Which of the following best describes economic growth?

FIGURE 2-14 -Refer to the figure. Why is the opportunity cost of producing a mountain bike different when moving from Point A to Point B than when moving from Point C to Point D along the production possibilities curve?

How does the fact that resources are not equally substitutable across uses affect the production possibilities curve?

There are four factors of production: land, labour, capital, and entrepreneurship.

Natural gas prices in Halifax, Nova Scotia, decrease because new wells are brought into production. At the same time, local oil prices rise because of increased shipping costs. As a result, what might you expect to find in the Halifax industrial sector?

What is the main reason economists are concerned about the problem of idle or unemployed resources?

What does the production possibilities curve illustrate?

The production possibilities curve for an economy that experiences a constant opportunity cost of production is linear (a straight line).

Which of the following statements about the production possibilities curve is the most accurate?

A devastating earthquake destroys 10 percent of the population in Vancouver. What is the result?

How is a technological advance that increases the productivity of all inputs best illustrated?

Individuals who live outside of urban areas continue to build their houses and businesses further and further out, spreading into farming communities and uninhabited areas. What are the trade-offs involved in allowing this type of community expansion?

In a market economy, government officials make most production decisions in a centralized manner.

Which one of the following will cause the production possibilities curve to shift outward?