Exam 2: Scarcity and the World of Trade-Offs

Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears. This best demonstrates the concept of

If the production possibilities curve is a downward sloping straight line, then

The only way that a society can produce outside the production possibilities curve is

Suppose you order a slice of pepperoni pizza and a soda at a shopping mall food court. What are examples of the opportunity costs of this decision?

Education increases the stock of which factor of production?

To have more consumer goods in the future, we must

Production refers to

Whenever a society forgoes current consumption to invest in capital goods,

The production possibilities curve shifts outward when

All of the following would cause the production possibilities curve to shift outward EXCEPT

Technology

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,

Explain what is meant by economic efficiency. Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain.

What is production? What economic factors are involved in production?

In economics, international trade is based on the existence of

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,

Opportunity cost

A waitress brings a free glass of wine when you sit down in a restaurant. This glass of wine is

Which of the following statements is TRUE about scarcity?

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