ECO 2023 Exam 1 || All Correct.

Scarcity correct answers unlimited wants but limited resources what is produced? correct answers economic question "what" How will goods and services be produced? correct answers economic question "how" Who will get the goods and services? correct answers economic question "who" Traditional approach correct answers do what we have always done. Inflexible Command approach correct answers government dictates what to produce market-based approach correct answers let prices, property right and markets answer the questions (this class) (capitalism) market correct answers any arrangement that allows buyers and sells to transact business prices correct answers determined in markets property rights correct answers socially determined legal rights that govern the ownership, use of, and disposal of property Adam Smith's invisible hand theory correct answers in a market economy with property rights, people acting in their own self-interest will do whats best for society Production possibilities frontier (PPF) correct answers shows the maximum feasible combinations of goods a society can produce, given current resources and technology production efficient correct answers points on the PPF (attainable) inefficient, attainable correct answers points with the PPF unattainable correct answers points outside the PPF allocatively efficient correct answers All combinations of goods along the PPF are production efficient. only one combination is.. opportunity cost correct answers the cost of the next best alternative foregone Loss/Gain law of increasing opportunity cost correct answers the opportunity cost of producing a good increases as more of it is produced (PPF is bowed outward because of this) shift in correct answers PPF shifts due to disease, natural disaster, act.