Exam 1: Scarcity and Choice

The branch of economics that focuses on the choices made by households and firms, and the effects that those choices have on particular markets, is

The 4 factors of production are land, labor, capital, and entrepreneurship.

If the supply of resources increases in the U.S., we can be sure that more goods and services will be produced.

In 2005, Hurricanes Katrina and Rita reduced the U.S. economy's output potential. This occurred primarily through the destruction of

The law of increasing opportunity costs is illustrated by a production possibilities curve that is bowed outward from the origin of the diagram.

Table 1.1. U.S. Production Possibilities Curve Data A B C D E F Capital goods 5 4 3 2 1 0 Consumer goods 0 12 22 30 36 40 -Refer to Table 1.1. If the economy produces 4 capital goods and 10 consumer goods, the economy

The bowed-out shape of a production possibilities curve illustrates

Economic growth occurs if an economy realizes an increasing resource base or technological advance.

Normative economics involves value judgments that cannot be empirically tested, while positive economics describes the facts of the economy.

The economic way of thinking includes all of the following principles except

"People are willing to work more hours if the federal minimum wage increases" is a positive economics statement.

A point outside the economy's production possibilities curve is

The law of increasing opportunity costs is best explained by

The law of increasing opportunity cost occurs because resources are not completely adaptable to alternative uses.

For a college student, the opportunity cost of attending a football game the night before an exam equals the ticket price plus the difference in her test score that the additional study time would have yielded.

Points outside the production possibilities curve are unattainable, given existing resources and technology.

Money and capital mean the same thing to economists.

All points along a production possibilities curve depict economic efficiency.

The source of the scarcity problem is that people have unlimited resources to satisfy their limited material wants.

When people act as if they are motivated by self-interest, and respond predictably to opportunities for gain, this is