Essentials of Economics (Schiller) - Chapter 1

When technological change allows a smaller amount of a resource to be used in producing two goods shown on a production-possibilities curve, there will be:

An outward shift of the production-possibilities curve.

In economics, capital refers to:

Goods that can be used to produce other goods.

The study of economics focuses on:

How best to allocate scarce resources.

Pollution is an example of:

Market failure.

A point lying inside the production-possibilities curve indicates that:

More output could be produced with existing resources.

Opportunity cost may be defined as the:

Most desired goods or services that are forgone in order to obtain a particular good.

Given that resources are scarce:

Opportunity costs are experienced whenever choices are made.

The economic problem of scarcity exists because:

Society's desires exceed the capability of the resources available to satisfy those desires.

The essential feature of the market mechanism is:

The price signal for both consumers and producers.

The fundamental problem of economics is:

The scarcity of resources relative to human wants.

The Latin phrase ceteris paribus means that all other factors are being held constant. True or False?

True.

Societies must address the question of WHAT to produce because:

We can't produce all the goods and services we want.

The production-possibilities curve shows that: a) At any point in time the production possibilities for an economy are limited. b) The production of all goods involves opportunity costs. c) Producing more of one good means producing less of another good. d) All of the above.

d) All of the above.

Which of the following are considered to be scarce in the U.S. economy? a) Farmland b) Machinery c) Workers d) All of the above

d) All of the above.

Which of the following is likely to occur because of a military build down in the U.S.? a) An increase in the peace dividend. b) A movement of some labor and capital away from the production of military goods. c) An increase in the production of consumer goods. d) All of the above.

d) All of the above.

Which of the following will cause the production-possibilities curve to shift outward? a) An increase in the number of women in the labor force. b) A higher level of literacy. c) An improvement in roads and highways. d) All of the above.

d) All of the above.