Chapter 2—Production Possibilities, Opportunity Cost, and Economic GrowthMULTIPLE CHOICE1.Which of the following is notone of the three fundamental economic questions?a.What happens when you add to or subtract from a current situation?b.For whom to produce?c.How to produce?d.What to produce?ANS:APTS:1DIF:ETOP:Three economic questionsTYP:RE2.Which of the following is correctlylists the three fundamental economic questions?a.If to produce? Why to produce? When to produce?b.If to produce? What to produce? How to produce?c.Why to produce? What to produce? How to produce?d.What to produce? How to produce? For whom to produce?ANS:DPTS:1DIF:ETOP:Three economic questionsTYP:RE3.Three basic decisions must be made by all economies. What are they?a.How much will be produced, when it will be produced, and how much it will cost.b.What the price of each good will be, who will produce each good, and who will consume each good.c.What will be produced, how goods will be produced, and for whom goods will be produced.d.How the opportunity cost principle will be applied, if and how the law of comparative advantage will be utilized, and whether the production possibilities constraint will apply.ANS:CPTS:1DIF:ETOP:Three economic questionsTYP:RE4.Because of the problem of scarcity, each economic system must make which of the following choices?a.How to produce?b.What to produce?c.For whom to produce?d.All of the above.ANS:DPTS:1DIF:ETOP:Three economic questionsTYP:RE5.Which fundamental economic question is mostclosely related to the issues of income distribution and poverty?
6.Which fundamental economic question requires society to choose the technological and resource mix used to produce goods?7.Opportunity cost:
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