Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
MicroEcon Chapter 2B
Thinking Like an Economist
| Question | Answer |
|---|---|
| Points on the PPF demonstrate what? | A point of production is possible, efficient and all resources are fully utilized. |
| What is the opportunity cost of an item? | What must be given up to obtain that item. Moving along a PPF involves shifting resources (e.g., labor) from producing one good to another. Society faces a tradeoff: Getting more of one good requires sacrifice of another. |
| How does economic growth affect the PPF? | It shifts the PPF outward. With additional resources or an improvement in technology, the economy can produce more |
| What can shift the PPF outward? | Economic growth, driven by additional resources or improvement in technology |
| The shape of the PPF js dependent upon what? | The shape of the PPF depends on what happens to opportunity cost as economy shifts resources from one industry to other. |
| If opportunity cost remains constant, you keep giving up the same amount of wheat, when you produce one more computer. What shape is the PPF? | The PPF is a straight line. |
| The PPF could be a straight line or bow-shaped. True or False. | True. |
| If opportunity cost of a good rises as more of the good is produced, you give up increased amounts of wheat, when you produce one more computer. What shape it the PPF? | PPF is bow-shaped. |
| A PPF becomes steeper when... | Opportunity cost increases. As the economy shifts resources from beer to mountain bikes: PPF becomes steeper. Giving up more and more beer per bike. |
| When is the PPF bow-shaped? | PPF is bow-shaped when different workers have different skills, different opportunity costs of producing one good in terms of the other. Brewers will not be good at producing mountain bikes! Opportunity cost is high. |
| What does a PPF show? | The PPF shows all combinations of two goods that an economy can possibly produce, given its resources and technology. |
| Microeconomics is the study of... | ...how households and firms make decisions and how they interact in markets. For example, effect of foreign competition on US Auto industry; effect of minimum wage on agricultural jobs. |
| Points under the PPF demonstrate what? | Possible, but not efficient as some resources underutilized (e.g., workers unemployed, factories idle). Economy can produce lot more. |
| Points above the PPF demonstrate what? | Not possible, as not enough resources. |
| The PPF illustrates the concepts of tradeoff and opportunity cost, efficiency and inefficiency, unemployment, and economic growth. True or False. | True. |
| Macroeconomics is the study of ... | Economy-wide phenomena, including inflation, unemployment, and economic growth. For example: Effect of government borrowing on US unemployment rate and economic growth. |
| What is the difference between micro and macroeconomics? | These two branches of economics are closely related, yet distinct—they address different questions. |
Created by:
Toods
Popular Economics sets