Exam 2: Scarcity and the World of Trade-Offs

In order for a production possibilities curve to shift to the right, which of the following must occur?

The opportunity cost of more consumption of goods today is

Why does the trade-off between consumption goods and capital goods represent a trade-off between the present and the future?

Scarcity implies that

If a CEO is a better at typing a document than his assistant, he is said to have a(n) ________ advantage in typing over his assistant.

Scarcity

What does scarcity have to do with the fact that people must make choices?

What does a production possibilities curve show?

The ability to produce a good at a lower opportunity cost than others is known as

Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?

People always face trade-offs because

Division of labor means that

Would a country with an absolute advantage in the production of all goods and services trade with other countries? Explain.

You have the option of consuming one can of soda or two cookies or three oranges. You picked the can of soda. Therefore the opportunity cost of this can of soda is

Technology is best defined as

What does the slope of the production possibilities curve represent? Explain.

The production possibilities curve shows all possible combinations of

When a country or a region of a country specializes in producing the product that has the lower opportunity cost compared to another country or region, it is practicing

In the above figure, moving from producing 50 guitars and 50 ukuleles to producing 25 guitars and 75 ukuleles, the opportunity cost of one ukulele is

The curve that represents all possible combinations of goods that can be produced is called