Exam 2: Confronting Scarcity: Choices in Production

A production possibilities curve measures cost in terms of dollars spent, not in terms of sacrificed alternatives.

There is no role for government in a market capitalist economy.

A production possibilities curve measures opportunity cost in dollar terms.

The law of increasing opportunity cost means that:

The slope of a production possibilities curve is based on opportunity cost.

In market capitalism:

An example of capital is:

One of the two criteria for a resource to be considered capital is that it must:

Use the following to answer question(s): Exhibit: Production Possibilities Curve 2 -(Exhibit: Production Possibilities Curve 2) The point representing a combination of consumer goods and capital goods that can be attained only by economic growth is point:

If countries do not engage in international trade:

If an economy is producing a level of output that is on its production possibilities curve, the economy

Improvements in technology will shift the production possibilities curve outward.

If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibilities curve has a(n):

If the U.S. economy adds to the capital stock, this may require a temporary decrease in the amount of present consumption.

The gains or benefits from trade are:

When a nation experiences economic growth:

A student receives a bachelor's degree in economics and then achieves gainful employment as an economic analyst with a Fortune 500 company. This new worker is likely to enhance the economy's productivity through:

If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear production possibilities curve for his farm, the opportunity cost of producing an additional pound of potatoes is _____ _ pound(s) of cabbage.

The three broad types of resources used to produce goods and services are also known as:

Use the following to answer question(s): Exhibit: Strawberries and Submarines -(Exhibit: Strawberries and Submarines) Suppose the economy is now operating at point A. The first submarine, which is achieved at point B, would have an opportunity cost of _______ million tons of strawberries.