Scarcity arises when our ____________________________.

wants exceed our resources
wants are unlimited
resources are limited
resources exceed our wants

Our factors of production include all the following except the __________________.

land, entrepreneurship, and human capital
skill of people, the money people own, and the capital that firms own
land, skill of people, and machines owned by firms
skill of entrepreneurs and people, the land they own, and their capital

The production possibility frontier separates _____________________________.

the combinations of goods that people value and those that they don't
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

When production is efficient, ____________________________.

we can satisfy our wants, but we incur an opportunity cost
we are willing to buy the goods produced as the opportunity cost is low
our choice of the goods to produce has no opportunity cost
we face a tradeoff and incur an opportunity cost

As we move along the bowed-out production possibility frontier, producing more tacos and less pizza, the opportunity cost of a taco ________________.

increases and then decreases
decreases
remains the same
increases

Beth eats two tacos for lunch. The marginal benefit that Beth gets from the second taco is the ________________________.

opportunity cost of producing two tacos
opportunity cost of producing the second taco
maximum amount that she is willing to pay for two tacos
maximum amount that she is willing to pay for the second taco

Economic growth comes from ________________________.

producing more goods than people want to consume
people willing to increase their skills in which case, economic growth is free
capital accumulation and the avoidance of opportunity cost
capital accumulation and technological progress

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
Tom can grow more tomatoes than Di can
his opportunity cost of tomatoes is less than his opportunity cost of turnips
his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes

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
each can produce a combination of goods that is outside her/his production possibility frontier
one of them will gain and the other will lose
each will have a combination of goods that is outside her/his production possibility frontier

Two social institutions that reduce transactions costs are _____________________.

property rights and laws
businesses and banks
markets and banks
markets and property rights

Please enter your name and press the SEND button