Chapter 1 - Chapter 1 When economists refer to scarcity...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 When economists refer to scarcity they mean: Human desires for goods are greater than the available resources Which of the following is a capital good? A grill to cook hamburgers Opportunity cost refers to: What you give up when you make an economic choice The opportunity cost of increased defense spending is: The production of other goods which could be produced with those same resources Which of the following does not describe scarce resources: The amount of labor available is always changing In drawing a country's production possibility curve, we assume that: The available resources are fixed in quantity The production possibilities curve implies all of the following except : Opportunity costs are constant The law of increasing opportunity cost exists because: It is difficult to move resources from one industry to another The "WHAT" question refers to: Will we produce more defense goods or more consumer goods? Adam Smith, the author of The Wealth of Nations , argued that the WHAT economic question should be handled by: the ‘invisible hand’, what consumers want to buy, and what is most profitable to business The FOR WHOM question in a market economy is answered by: The person who is willing to pay the price The United States economy is so affluent, that it does not face the scarcity problem. FALSE Economics is the study of how to use scarce resources. TRUE The government of North Korea decided to increase food production and give up military production. FALSE All choices on the production possibility curve are both desirable and efficient. FALSE India is attempting to move its production from a point inside their production possibility curve to one on the curve. TRUE
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 2 The size of the US economy as measured by GDP is: The largest economy in the world GDP measures: The quantity of goods and services produced in a country in one year. GDP per capita measures: The dollar value of output divided by the population Economic growth means: That the production possibilities curve has shifted outward In poor nations: Population growth exceeds output growth The mix of output in the United States has: Shifted primarily from the production of goods to services Which of the following is not a major user of production: Stock investors An example of a business investment good is: A purchase of a new piece of equipment Government purchases are included in GDP: Because it represents a demand for new products and services International trade allow countries to: Export what they have a comparative advantage in and import goods which they do not produce as efficiently Productivity refers to: The output per labor hour Investments in human capital include: Spending on education and job training With technological advances: A country can produce more output with fewer resources Which of the following is a role for government in an economy? Providing a legal framework,
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/19/2011 for the course ECO 2023 taught by Professor Barefield during the Spring '09 term at Tallahassee Community College.

Page1 / 13

Chapter 1 - Chapter 1 When economists refer to scarcity...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online