Exam 2: Production Possibilities, Opportunity Cost, and Economic Growth

Which word best completes the following sentence? A rational decision maker always chooses the option for which marginal benefit is __________ marginal cost.

Three basic decisions must be made by all economies. What are they?

Exhibit 2-13 Production possibilities curve In Exhibit 2-13, which of the following is not true regarding point H? Point H:

The production possibilities curve depicts the various combinations of two goods that can be:

The production possibilities curve illustrates all of the following concepts except :

An opportunity cost is the highest valued alternative foregone whenever one chooses an alternative.

Graphically express a production possibilities curve. What do points on, inside and outside the curve represent? What does a rightward shift of the curve represent? How is economic growth expressed in terms of the production possibilities model?

Exhibit 2-16 Production possibilities curve In Exhibit 2-16, to move from U to B, the opportunity cost:

In economics, investment refers to the process of accumulating:

The production possibility curve is bowed outward from the origin because of:

Exhibit 2-8 Production possibilities curve data As shown in Exhibit 2-8, a total output of 0 units of capital goods and 10 units of consumer goods is:

Exhibit 2-2 Production possibilities curve The production possibilities in Exhibit 2-2 indicates that the opportunity cost of corn is:

Exhibit 2-18 Production possibilities curves In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This country:

When the production possibilities curve is bowed out, resources are:

While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75. She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of:

Given a production possibilities curve, a point:

If an economy is producing at full employment, it means that:

If society leaves some of its resources unemployed, then it will be operating at a point:

When an economy's resources are not fully employed, then it must be true that the:

Which of the following would be least likely to cause the production possibilities curve to shift outward?