Exam 2: Scarcity and the World of Trade-Offs

Explain how comparative advantage, specialization and division of labor are related.

Which of the following is NOT an assumption used in deriving a production possibilities curve?

-Refer to the above figure. Which of the following would allow society to move to point d?

You have the option of consuming one cup of coffee or two donuts or three oranges. You picked the cup of coffee. Therefore the opportunity cost of this cup of coffee is

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

-Refer to the above figure. Which one of the following statements is true with regard to the economy depicted in the graph?

Generally, specialization leads to

If opportunity costs are constant, then

Bonnie is a self employed. She makes floral arrangements in a building she rents. She owns the delivery vehicle and has hired a delivery driver. She is an example of

What happens to the production possibilities curve if technology enables an economy to produce more of every good? Is there any tradeoff involved in this change?

When a country specializes and trades with other countries, it is most likely that it specializes in goods for which

Scarcity exists because

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

With specialization,

How are scarcity, choice, and opportunity cost related?

Briefly explain the factors of production and give an example of each.

Scarcity implies that people must

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

Economic goods are items that

The term "labor" for an economist includes