Scarcity arises when our ____________________________.

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

Our productive resources include all the following except the __________________.

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

The production possibility frontier separates _____________________________.

the combinations of goods that people value and those that they don't
the quantities of goods and services that can be produced from those that cannot be produced
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

When production is efficient, ____________________________.

we can satisfy our wants, but we incur an opportunity cost
we face a tradeoff and 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

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
increases
decreases
remains the same

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

opportunity cost of producing the second taco
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

Economic growth comes from ________________________.

capital accumulation and technological advance
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

Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if _________________.

his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes
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

If Tom and Di specialize in producing the goods in which he and she have a comparative advantage and they exchange goods, then ____________________.

each will have a combination of goods that is outside her/his production possibility frontier
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

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

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

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