CH 2

Question 1

Microeconomics

Answer 1

small individual choices

Question 2

Macroeconomics

Answer 2

big (national/global)

Question 3

Tradeoffs

Answer 3

trading off one goal versus another. Having to give up something

Question 4

Opportunity Cost

Answer 4

The second best option

Question 5

Incentives

Answer 5

something that induces a person to act

Question 6

Marginal benefit

Answer 6

max amount a consumer is willing to pay for one additional unit of a good or service

Question 7

marginal cost

Answer 7

cost for producing one additional unit of good/service

Question 8

Absolute Advantage

Answer 8

More of a good produced with the same amount of resources

Question 9

Comparative Advantage

Answer 9

smaller opportunity cost of producing a good

Question 10

Production Possibilities Frontier (PPF)

Answer 10

graph that shows various combinations of two goods that can be produced in an economy given the available resources

boundary between what can and can’t be produced

Question 11

increasing OC PPF

Answer 11

resources are not equally suited for production of two diverse goods
(ex. corn and N95 masks)

Question 12

constant OC PPF

Answer 12

resources are equally suited for the production of two goods
(toilet paper and paper towels)

Question 13

Joint PPF

Answer 13

shows max amount of two goods that can be produced with two resources