True or False:
1. Consumer sovereignty describes how individual consumers in market economies determine what is to be produced.
2. Command economies rely on central planning, where decisions about what and how many are largely determined by a government official associated with the central planning organization.
3. All economies, regardless of political structure, must decide how, from several possible ways, to produce the goods and services that they want.
4. In any economy, it would always be less efficient to dig ditches by having many workers use their hands than to use workers with shovels or a backhoe.
5. Each nation tends to use the production processes that conserve its relatively scarce (and thus relatively more expensive) resources and use more of its relatively abundant resources.
6. In a market economy, with private ownership and control of the means of production, the amount of output one is able to obtain depends on the quantity and quality of the scarce resources that the individual controls.
7. The market where households sell the use of their inputs to firms is called the product market.
8. The circular flow model illustrates the continuous flow of goods, services, inputs, and payments between firms and households.
9. With a straight-line production possibilities curve, the opportunity cost of producing another unit of a good increases with its output.
10. The economy cannot produce beyond the levels indicated by the production possibilities curve during a given time period, but it is possible to operate inside the production possibilities curve.