Exam 2: Scarcity and the World of Trade-Offs

Typically, the greater the specialization of resources

Scarcity affects

"Because resources are scarce, the production of more capital goods means that fewer resources are available to produce consumption goods, so there is less current consumption." Do you agree or disagree? Explain.

The use of goods and services for personal satisfaction is known as

Briefly explain why people make choices.

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

"Economics deals with human needs." Do you agree or disagree? Why?

Opportunity cost is defined as

The trade-off between current consumption and the production of capital goods is also a trade-off between

Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because

Refer to the above figure. Between points f and g, the opportunity cost of producing 75 more bushels of wheat is

An efficient point of production is

Which of the following would result in a movement along the production possibilities curve?

A bowed production possibilities curve is consistent with

Production refers to

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.

Refer to the above figure. Given our current level of technology and resources, the unobtainable point(s) of production would be

A bowed-outward production possibilities curve demonstrates the concept of

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

A bowed Production Possibilities Curve (PPC) indicates