Exam 2: Scarcity and Opportunity Costs

Assume that a doctor makes $200 per hour, a lawyer $250 per hour, an architect $140 per hour, a professor $50 per hour, and a waiter $35 per hour. Which of these professionals is most likely to spend time to negotiate with a car dealer?

When there is a choice between the consumption of bundle X and bundle Y, the opportunity cost of consuming bundle X is bundle Y.

Voluntary free trade results in:

Which of the following actions is most likely to cause a rightward shift in a production possibilities curve [PPC]?

Suppose a society begins by producing 3 units of X and 4 units of Y and then alters production to 4 units of X and 4 units of Y. If the quantity and quality of resources and the technology being used remain unchanged, then:

If using the same resources, the U.S. workers can produce more of any good than Mexican workers, then the United States should produce every good.

Specialization according to comparative advantage followed by free trade makes every economy better off.

Which of the following is an example of opportunity cost?

If an economy is operating at a point outside the PPC, either the society has resources that are not being fully used or production is not efficient.

If an individual can produce a good or service with a lower opportunity cost than another individual, then he or she is said to have the comparative advantage.

An economy's PPC illustrates the extent to which the economy consumes what it produces.

Which economic concept is the closest to the saying "There's no free lunch"?

Which of the following will bring about an inward shift of a production possibilities curve [PPC]?

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.?Table 2.1 -Refer to Table 2.1. According to the production possibilities schedule, in the table above, which of the following statements is true?

A point outside the production possibilities curve [PPC]:

The figure given below represents an economy producing corn and planes under different economic situations.?Figure 2.2 -Refer to Figure 2.2. If there is an increase in the education level of the population, graph(s) _____ best illustrate(s) what will happen to the production possibilities curve [PPC].

Figure 2.4 -Refer to Figure 2.4 and identify the correct statement.

Nicky makes $25,000 a year as a sales clerk. He then decides to quit his job to enter a MBA program full-time (assume Nicky doesn't work in the summer or hold any part-time jobs). His tuition, books, living expenses, and fees total $15,000 a year. Given this information, the annual total cost of Nicky's MBA studies is:

Shirley can choose between peanut butter pretzels and caramel coated popcorn for her evening snack. According to economists, her _____ cost of consuming caramel coated popcorn would be the forgone peanut butter pretzels.

Jane wins $100,000 in a lottery and immediately uses her winnings to open up a donuts shop. Her direct cost is $50,000, and she puts the remaining money in a savings account earning 10 percent annual interest. Alternatively, Jane could have placed all her lottery winnings in the 10 percent savings account. Jane's total cost of opening up a donuts shop is: