Limits, Alternatives, and Choices

refer to the table. if the economy is producing at production alternative C, the opportunity cost of the tenth unit of consumers goods will be:

1/3 of a unit of capital good

refer to the tables. if north cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be

1/8 of a unit of capital goods

which of the following is a land resource

silicon (sand) used to make computer chips

economics may best be defined as the

social science concerned with how individuals, institutions, and society makes optimal choices under conditions of scarcity

you should decide to go to a movie

if the marginal cost of the movie exceeds its marginal cost

In drawing the production possibilities curve we assume that

technology is fixed

if the output of product X is such that marginal benefit equals marginal cost

the correct amount of resources is being allocated to X's production

macroeconomics approaches the study of economics from the viewpoint of

the entire economy

the production possibilities curve shows

the various combinations of two goods that can be produced when some resources are unemployed

refer to the graphs, assume that pizza is measured in slices and beer in pints. In which of the graphs is the opportunity cost of a pint of beer the lowest?

Graph B, Although B&C they are the same price is what we are looking at

refer to the graphs, assume that pizza is measured in slices and beer in pints. in which of the graphs is the opportunity cost of a pint of beer equal to one slice of pizza?

Graph D

the alternative combinations of two goods which a consumer can purchase with a given money income is shown by

a budget line

which of the following is real capital

a construction crane

the assertion that "there is no free lunch" means that

all production involves the use of scarce resources and thus the sacrifice of alternative goods.

if an economy is operating inside its production possibilities curve for consumer goods and capital goods, it

can produce more of both consumer goods and capital goods by using resources that are currently idle.

the study of economics is primarily concerned with:

choices that are made in seeking the best us of resources

refer to the diagram Curve C is

is a more desirable production possibilities curve for an economy than curve A

refer to the tables. the opportunity cost of the fifth unit of capital goods

is higher in north cantina than in south cantina

unemployment

is illustrated by a point inside the production possibility curve

the four factors of production are

land, labor, capital, entrepreneurial ability

refer to the table. for these data the law of increasing opportunity costs is reflected in the fact that

larger and larger amounts of capital goods must be sacrificed to get additional units of consumer goods.

the economizing problem is one of deciding how to make the best use of

limited resources to satisfy virtually unlimited wants

when economist say that people act rationally in their self interest, they mean that individual

look for and pursue opportunities to increase their utility

if an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that

more consumer goods can only be produced at the cost of fewer capital goods

refer to the tables. suppose that resources in north cantina and south cantina are identical in quantity and quality. we can conclude that

north cantina has better technology than south cantina in producing consumer goods but not capital goods

the scarcity problem

persists because economic wants exceed available productive resources

for economist, the word "utility" means:

pleasure and satisfaction

refer to the diagram. Curve B is

production possibilities curve indicating constant opportunity costs

if the production possibilities curve were a straight down-sloping line, this would suggest

resources are perfectly shift-able between the production of these two goods

a production possibilities curve illustrates

scarcity

refer to the diagram for athletic shoes. if the current output of shoes in Q3 then

society would consider additional units of shoes to be less valuable than alternative products

refer to the diagram for athletic shoes. if the current output of shoes is Q1, then

society would consider additional units of shoes to be more valuable than alternative uses of those resources

refer to the tables. suppose that north cantina is producing 2 units of capital goods and 17 units of consumer goods while south cantina is producting 2 units of capital good and 21 units of consumer goods. we can conclude that

south cantina is fully and efficienty using its resources but noth cantina is not

macroeconomics can best be described as the

study of the large aggregates of the economy or the economy as a whole

refer to the table. as compared to production alternative D, the choice of alternative C would

tend to generate a more rapid growth rate

a typical concave (to the origin) production possibilities curve implies

that society must choose among various attainable combinations of goods.

which of the following will not produce an outward shift of the production possibility curve

the reduction of unemployment

when the economist says that economics wants are insatiable, this means that

these wants are virtually unlimited and therefore incapable of complete satisfaction

the negative slope of the production possibilities curve is a graphical way of indicating that

to produce more of one product we must do with less of another

refer to the diagram for athletic shoes. the optimal output of shoes is

Q2

which of the following is a labor resource

a computer programmer

refer to the table. a total output of 3 units of capital goods and 4 units of consumer good

would involve an inefficient use of the economy's scare resources

refer to the tables. if south cantina is producing at a production alternative D, the opportunity cost of the third unit of capital goods will be:

6 units of consumer goods

refer to the diagram, as it relates to production possibilities curve analysis, the law of increasing opportunity cost is reflected in curve

C

refer to the diagram. other things equal, this economy will achieve the most rapid rate of growth if

Point A

refer to diagram. this economy will experience unemployment if it produces at point

Point D

microeconomics is concerned with

a detailed examination of specific economic units that make up the economic system

the typical production possibilities curve is

a down-sloping line that is concave to the origin

which of the following is a capital resource

a piece of software used by a firm

refer to the table. for this economy to produce a total output of 3 units of capital goods and 13 units of consumer goods it must

achieve economic growth

a person should consume more of something when its marginal

benefit exceeds its marginal cost

if the production possibilities curve is a straight line

economic resources are perfectly substitute between the production of the two products.

the production possibilities curve illustrates the basic principal that

if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced