Exam 2: Scarcity, choice, and Economic Systems

The specialization of labor

If Bob has an absolute advantage over Pete in both typing and woodworking,then Bob also has a comparative advantage over Pete in both activities.

If a society is on its production possibilities frontier,and decides to produce more health care,

Figure 2-3 -Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes.The opportunity cost of moving from point A to point E is

Figure 2-9 -Assume that the publishing industry produces novels and textbooks,as shown in the production possibilities frontier in Figure 2-9.Moving from point H to G,the opportunity cost of those five additional textbooks equals

Figure 2-2 -Assume that U.S.agricultural land is used either to raise cattle for beef or to grow wheat.Figure 2-2 represents the production possibility frontier for beef and wheat.What is assumed constant as the economy moves from point F to point G?

A weakness of the market system of resource allocation is that

In a market system,resources are allocated by

A society is saving lives (productively)efficiently if

Figure 2-3 -Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes.At which point would the plant be under-utilizing its resources?

If the labor force in an economy is not fully employed,then

The law of increasing opportunity cost says that

All of the following,except one,help explain why specialization leads to greater production than is otherwise possible.Which is the exception?

The three primary systems for allocating resources are

-Figure 2-5 shows five different combinations of rockets and cruise ships that a country could manufacture.Suppose it decided to produce 18 rockets and 12 cruise ships.Which of the following would be true?

When opportunity costs rise as more of a good is consumed,the production possibilities frontier will be concave (bowed out)with respect to the origin.

Which of the following could explain the shift in the production possibilities frontier shown in Figure 2-7 from AC to AB?

The production possibilities frontier can be used to illustrate all of the following concepts,except one.Which is the exception?

If a life can be saved for $250 using Method A and $260 using Method B,

If the U.S.government decides to distribute surplus cheese to food banks for the homeless,the government is addressing the question of