Exam 3: Scarcity, Trade-Offs, and Production Possibilities

Exhibit 3-2 Refer to Exhibit 3-2.In the circular flow diagram,payments for goods and services:

Exhibit 3-4 Refer to Exhibit 3-4.Based on the production possibilities curve above,which of the following points are inefficient?

Which of the following is an incorrect statement?

The use of large amounts of labor relative to capital in an economy indicates:

Suppose Freeland produces few consumption goods and many investment goods while Liberty Nation produces few investment goods and many consumption goods.Other things equal,you would expect

Which concept explains how individual consumers in market economies determine what is to be produced?

Other things being constant,an economy must give up some consumer goods and services today to produce more capital goods in order to grow.

An increase in available resources will tend to cause a society's production possibilities curve to shift inward.

Which of the following is not a resource exchanged in the factor markets?

Exhibit 3-10 Refer to Exhibit 3-10.Societies choose between the level of consumption goods and capital goods.With reference to the diagram,if a society moves from Point B to Point A:

The opportunity cost of a particular good tends to increase with its rate of output because some resources cannot be easily adapted from the production of one good or service to another.

In a market operating along the production possibilities curve,which of the following is inevitable if the production of one of the goods is increased?

An economy is producing two goods,ice cream and cookies,and is currently operating efficiently.This economy can produce more cookies if:

When collective decision making is utilized to resolve economic questions regarding the allocation of resources,then:

Explain how each of the following could discourage economic growth: a.The government closes all of the schools so that more people will be available for work. b.The country fears military invasion and spends half of its income on military goods.

An increase in the unemployment rate from 15 percent to 20 percent might be illustrated as:

Workers in the 1800s building railroads by hand was an example of a(n)____ intensive form of production.

Draw a picture of a production possibilities curve.Identify each axis as measuring either guns or butter.Select and label Point A,which is beyond the economy's ability to produce; Point B,which represents an inefficient level of production; Point C,an efficient combination of output in which more guns are produced than units of butter; and Point D,an efficient production point in which more units of butter are produced than guns.Be sure to label each clearly.

Which of the following is most limited in scope under a pure market economy?

A system of economic organization in which the ownership and control of productive capital assets rests with the state and resources are allocated through central planning and political decision making is called: