1. Economics is the study of how people can get anything they want.
   
   
2. Scarcity is a characteristic of a command economy, but not of a market economy.
   
   
3. An opportunity cost occurs every time there is a choice.
   
   
4. Gains from trade occur only in markets.
   
   
5. If Canada produces two goods with less resources than the United States, there can be no comparative advantage in those two goods.
   
   
6. Trade takes place both within and between countries.
   
   
7. Production possibilities represent the best choice of goods for the economy to produce.
   
   
8. The production possibilities curve slopes downward.
   
   
9. The production possibilities curve is linear.
   
   
10. Points on the production possibilities curve are efficient.
    
    
11. Points inside the production possibilities curve are inefficient.
    
    
12. A market economy is also called a centrally planned economy.
    
    
13. In recent years, Eastern Europe, the former Soviet Union, and China have moved away from central planning.
    
    
14. Freely determined prices and property rights are characteristics of centrally planned economies.
    
    
15. One reason why organizations are created is that they eliminate market failure.