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

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

How does an economist define efficiency?

FIGURE 2-4 -Refer to Figure 2-4. Currently, which point is impossible to achieve?

Along a production possibilities curve that is concave to the origin, what happens to the opportunity cost of production of the good on the X-axis as we move down along the curve?

FIGURE 2-10 -Refer to Figure 2-10. Societies choose between the level of current consumption and current investment. What is occurring if a society moves from Point B to Point A?

Capital, entrepreneurship, land, and labour are needed to produce goods and services. What are the respective payments for each of these factors of production?