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

FIGURE 2-7 -Refer to Figure 2-7. What does Point B indicate about the economy?

FIGURE 2-3 -Refer to Figure 2-3. An economy is operating at full employment, and then workers in the bread industry are laid off. How is this change portrayed on the production possibilities curve?

FIGURE 2-7 -Refer to Figure 2-7. What happens in the economy when production moves from Point A to Point B?

Any output combination outside the production possibilities curve is attainable in the current period only if prices decrease.

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 prison cells?

Consumer sovereignty means that consumers vote with their dollars in a market economy, which helps determine what is produced.

FIGURE 2-10 -Refer to Figure 2-10. Which of the following best explains how the society producing breadfruit and fish could have moved from curve AA to curve BB?

FIGURE 2-12 -Refer to Figure 2-12. Which of the following statements about a movement from Point D to Point F is the most accurate?

Which of the following will NOT shift the production possibilities curve in an inward direction?

FIGURE 2-5 -Refer to Figure 2.5. How could Point D be described?

FIGURE 2-11 -Refer to Figure 2-11. How is the statement "To get more apples, we have to give up wheat" best illustrated in the above diagram?

FIGURE 2-13 -Refer to Figure 2-13. Which of the following is a possible explanation for the shift of the production possibilities curve illustrated above?

Lumber prices fall in Calgary, Alberta, because new forests are opened for harvesting in nearby British Columbia. As a result, what might you expect to find in the Calgary housing industry?

If the production possibilities curve is a straight line, what does this illustrate?

FIGURE 2-3 -Refer to Figure 2-3. Other things being equal, where would the economy operate in order to achieve the greatest economic growth over time?

In a market economy, prices help determine the distribution of goods and services but not the allocation of resources.

FIGURE 2-2 -Refer to Figure 2-2. Which of the following statements about a movement from Point B to Point C is the most accurate?

FIGURE 2-9 -Refer to Figure 2-9. If an economy operates at Point A on the production possibilities curve, then which of the following statements is accurate?

FIGURE 2-8 -Refer to Figure 2-8. In order to move from Point B to Point C, what will the economy have to give up?

If the economy of Taiwan is growing more rapidly than the economy of Japan, which of the following is most likely?