Suppose iPhones cost consumers $200 and USB cables cost consumers $25. What contribution does the production of 2,000 iPhones and 1,200 USB cables make to GDP?
Opportunity cost may be defined as the
o . Goods or services that are forgone in order to obtain something else.
0 Dollar prices paid for final goods and services.
0 Dollar cost of producing a particular product.
0 Difference between wholesale and retail
Opportunity cost is
0 Measured only in dollars and cents.
O The total dollar cost to society of producing the goods.
0 The difficulty associated with using one good in place of another.
0 . What is given up in order to get something else.
In economics, scarcity means that
O A shortage of a particular good will cause the price to fall.
0 A production possibilities curve cannot accurately represent the trade—off between two goods.
0 . Society's desires exceed resources available.
0 The marke
Instructions: You may select more than one answer. Click the box once to insert a check mark for a correct answer and click twice to empty
the box for a wrong answer.
(a) At which point(s) is this society producing some of each type of output but still pr
Food Output (units per year)
Military Output (units per year)
How much food production is sacriﬁced when North Korea moves from point P to point N?
Point P indicates that North Korea is producing a combination of G units of food and
Refer to the table and ﬁgure below:
Output of Trucks (per day)
Output of Tanks (per day)
What is the opportunity cost of the ﬁrst truck produced?
Instructions: Enter your response rounded to one decimal place.
What are the three core economic questions societies must answer?
What to produce, how to produce, and for whom to produce
(1) WHAT to produce: Limited as we are by scarce resources, we have to decide how best to use these resources. Every ti
(d) Which curve best represents the change that would occur if the resources of this society doubled?
PPC1 to PPC2
(e) Which curve best represents the change that would occur with a huge natural disaster that destroyed 40 percent of production capacity?
The fundamental problem of economics is
O The law of increasing opportunity costs.
0 . The scarcity of resources relative to human wants.
0 How to get government to operate efficiently.
0 How to create employment for everyone.
The sum ofvalue added
0 Measures the intangible quality of goods and services produced in the economy.
0 Equals the sum of the value of intermediate goods.
. Is one way to compute the GDP.
0 Equals net domestic product.
The GDP per capita is the most practical way to
0 Measure how much income households receive.
0 Measure how much output can be consumed on a sustainable basis.
. Make international comparisons of the standard ofliving.
O Analyze the growth rate of the eco
The production possibilities curve illustrates which two of the following essential principles?
0 Factors of production and price signals.
0 . Scarce resources and opportunity cost.
0 Market mechanisms and laissez faire.
0 Economic growth and market failu
The market mechanism
0 Is not a very efficient means of communicating consumer demand to the producers of goods and services.
0 Works through central planning by government.
0 Eliminates market failures created by government.
a . Works because prices serv
The market mechanism may best be defined as
—) O The use of market prices and sales to signal desired output.
9 . The use of market signals and government directives to select economic outcomes.
0 The process by which the production possibilities curve sh
A technological advance would best be represented by
a . A shift outward of the production possibilities curve.
0 A shift inward of the production possibilities curve.
0 A movement from inside the production possibilities curve to a point on the productio
If an economy is producing inside the production possibilities curve, then
0 There is full employment of resources.
0 It is operating efficiently.
o . It can produce more of one good without giving up some of another good.
0 There are not enough resources
According to the law of increasing opportunity costs,
0 The more one is willing to pay for resources, the smaller will be the possible level of production.
0 Increasing the production of a particular good will cause the price of the good to remain constan
OUTPUT 0F MOPS
OUTPUT OF BROOMS
Using Figure 1.3 and starting from PP1, an increase in the capacity to produce can be represented by a movement from
0 Point A to point B.
O PointAto point c.
0 Point B to point C.
a . Point C to point