CH 04: Production possibilities curve Flashcards
• scarcity • choice • inefficiency • efficiency • opportunity cost • increasing opportunity cost • change in production capacity • impact of investment
1
Q
Where would a point lay if it was in a position of scarcity?
A
Outside the PPC
2
Q
A point within a PPC is a point showing?
A
Inefficiency
3
Q
A point on the PPC, is?
A
Technical efficiency
4
Q
What is allocative efficiency?
A
The optimal (best) combination of goods and services desired by consumers.
5
Q
If we produce 2000 laptops and 24000 phones. In an increase in production to 3000 laptops means we can only produce 18000 phones. What’s the opportunity cost of the increase in Laptop production.
A
6000 phones
6
Q
Economic growth causes?
A
A shift of the PPC
7
Q
What causes a PPC to swivel?
A
A change in the efficiency of one resource.
