PracticesPart2 - 1 Scarcity arises when our _. resources...

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1 Scarcity arises when our ____________________________. resources exceed our wants resources are limited wants exceed our resources wants are unlimited 1 2 Our productive resources include all the following except the __________________. land, skill of people, and machines owned by firms land, entrepreneurship, and human capital the money people own and the consumption goods that they buy, land skill of entrepreneurs and people, the land they own, and their capital 1 3 The production possibility frontier separates _____________________________. the types of goods that can be attained from those that can't be unattained the goods and services that people want from those that they do not want the quantities of goods and services that can be produced from those that cannot be produced the combinations of goods that people value and those that they don't 1 4
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When production is efficient, ____________________________. we can satisfy our wants, but we incur an opportunity cost our choice of the goods to produce has no opportunity cost we are willing to buy the goods produced as the opportunity cost is low we face a tradeoff and incur an opportunity cost 1 5 As we move along the bowed-out production possibility frontier, producing more tacos and less pizza, the opportunity cost of a taco ________________. remains the same decreases increases and then decreases increases 1 6 Beth eats two tacos for lunch. The marginal benefit that Beth gets from the second taco is the ________________________. maximum amount that she is willing to pay for two tacos opportunity cost of producing two tacos maximum amount that she is willing to pay for the second taco opportunity cost of producing the second taco 1 7
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Economic growth comes from ________________________. producing more goods than people want to consume capital accumulation and the avoidance of opportunity cost people willing to increase their skills in which case, economic growth is free capital accumulation and technological advance 1 8 Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if _________________. his marginal benefit from tomatoes is greater than Di's his opportunity cost of tomatoes is less than his opportunity cost of turnips Tom can grow more tomatoes than Di can his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes 1 9 If Tom and Di specialize in producing the goods in which he and she have a comparative advantage and they exchange goods, then ____________________. they will lose as they produce only one good each one of them will gain and the other will lose each can produce a combination of goods that is outside her/his production possibility frontier each will have a combination of goods that is outside her/his production possibility frontier 1 10 Two social institutions that are essential for trade to be organized are _____________________.
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This note was uploaded on 01/19/2011 for the course FINANCE econ101 taught by Professor Hamdibilici during the Fall '10 term at CSU Long Beach.

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PracticesPart2 - 1 Scarcity arises when our _. resources...

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