Exam 3: The Fundamental Economic Problem: Scarcity and Choice

Ex-London School of Economics student Mick Jagger sang, "You can't always get what you want, but if you try sometime, you just might find you can get what you need." Another statement of the basic economic principle expressed in this lyric is that

A rational decision is one that

If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely

Rational production decisions require an understanding of

Because of scarcity, every economic decision involves

List the three coordination decisions made by every economy.

Inputs in production processes are called resources.

Economic growth solves the problem of scarcity.

Voluntary exchange

Waiting in line to get a free ticket does not involve any opportunity cost.

Which of the following is not an example of a type of factor of production?

What is the basic task that economists expect the market to carry out?

If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat.

In a market economy, the decision regarding allocation of resources is made by

Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made.

What mechanism assures that producers use inputs efficiently?

Probably the most important source of efficiency in production is

What determines the position and shape of a society's production possibilities frontier?

Few bother to think about what makes Florida oranges show up daily in South Dakota supermarkets, but the people of South Dakota are likely to think a great deal about this.Why does someone take the time and energy to assure that oranges which are grown in Florida move more than 1,000 miles before they appear on grocery shelves?

The scarcity of physical resources such as fuel means: