Exam 2: Scarcity and the World of Trade-Offs

John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

The production possibilities curve demonstrate which of the following concepts?

Briefly explain the difference between the concepts of scarcity and shortage.

A movement along the production possibilities curve would imply that

Scarcity is

The production possibilities curve shifts outward when

Economic growth can be pictured in a production possibilities curve diagram by

If an economy produces only steel and wheat, a new fertilizer will

Which of the following is NOT a factor of production?

As an economy moves from point to point along its production possibilities curve, which one of the following variables changes?

Steve and Karen decide to attend the same concert when they are each given free tickets to it. We know that

Distinguish the concepts of comparative advantage and absolute advantage.

Which of the following statements is TRUE about scarcity?

According to the concept of comparative advantage, a good should be produced in that nation in which

Technology is best defined as

-In the above figure, the opportunity cost of moving from point D to point C is

Scarcity exists because

A country operates inside its production possibilities curve; this may be caused by

If the quantity desired of something exceeds the amount available at zero price, that item is called

Economic goods are