Scarcity arises when our ____________________________.

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

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
skill of entrepreneurs and people, the land they own, and their capital

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

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

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

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

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

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

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

Two social institutions that are essential for trade to be organized are _____________________.

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

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