Exam 2: Scarcity and the World of Trade-Offs

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

Explain what will happen to the production possibilities curve over time if society gives up some consumption goods in favor of more capital goods.

Refer to the above figure. How do you describe what is happening as the economy moves from point A to point C?

The production possibilities curve represents

In the above figure, the production of 25 guitars and 25 ukuleles is

"Economics is the study of how people eliminate scarcity." Do you agree or disagree? Why?

The saying that "You cannot have your cake and eat it too" illustrates the economic concept of

Which of the following is the LEAST scarce?

Which is the best example of specialization?

With specialization

Matt and Ann both decide to go to a concert with free tickets. We know that

-Refer to the above figure. Which of the following statements is TRUE?

Which of the following is NOT a service?

The opportunity cost of a decision is the

In the production of goods and services, trade-offs exist because

A bowed outward production possibilities curve occurs when

The text argues that if avocado growers in Mexico can produce avocadoes cheaper than avocado growers in the United States, this will not reduce total jobs available in the United States. The logic underlying this argument is that

In the above figure, the farmer faces a trade-off between beans and wheat equal to

Based on the above figure, if countries "A" and "B" faced the production possibilities curves above, both countries would benefit if

Politicians often argue that a country's standard of living is reduced when it allows imports into the country. Offer an economically sound counter-argument.