Chapter 1&2 Assignment

1)

Consider the figure. This economy moved from production possibilities boundary A to
production possibilities boundary B because:
 there has been growth in productive capacity
2) Which of the following is one of the four basic questions that must be answered in all
economies?
 What is produced & how?
3) A point on a production possibilities boundary shows an—efficient combination of goods.
4) In a free-market economy—most decisions are left to the price system.

5) In a command economy—most decisions are planned by the government

6) Which countries have mostly public ownership of resources?

 Myanmar & North Korea

7) Most modern economies in the world today

 Have a mix of traditional, command & market elements
8) Which of the following best describes one of three economic concepts illustrated by the
production possibilities boundary?
 Scarcity is indicated by the unattainable combinations outside the boundary