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