1.3 + 1.4 Opportunity cost and PPC

Question 1

Opportunity cost

Answer 1

The next best alternative foregone

Question 2

PPC

Answer 2

The maximum combination of any two goods that an economy can produce with all available resources, assuming a fixed level of resources and technology

Question 3

Points inside a PPC

Answer 3

Indicate either an inefficiency in production, or an inefficient use of economic resources or both.

Question 4

What do points outside the PPC indicate

Answer 4

Indicate an unattainable combination of the two goods given the current level of technology and economic resources

Question 5

How to achieve economic growth

Answer 5

Either the quantity, or the quality or both of the economic resources an economy is consuming needs to increase.

Question 6

Ways to achieve economic growth

Answer 6

An increase in trained labour
New economic resources are found
Innovation and new technology

Question 7

What is Negative economic growth

Answer 7

When the quality, quantity, or both of economic resources decreases, the ability of the economy to produce goods will decrease.
PPC moves inwards.

Question 8

Reasons of negative economic growth

Answer 8

Outwards migration
Non-renewable resources depleted
Capital wears out and is not replaced or maintained
The quality of labour decreases if they aren’t trained and educated enough

Question 9

What is an economy

Answer 9

An area in which the economic activities of production, exchange and consumption take place