Chapter 2 Flashcards
Which point is unattainable with current resources, one within, on, or outside the production curve
outside
Candace can perform either a combination of 35 manicures and 70 pedicures or a combination of 50 manicures and 45 pedicures. If she now performs 35 manicures and 70 pedicures, what is the opportunity cost of performing an additional 15 manicures?
25 pedicures
Production Choices for Love’s Kitchen
Choice Quantity of Cakes Produced Quantity of Roast Chicken Produced
A 80 0
B 60 25
C 40 50
D 20 75
E 0 100
Refer to Table 2-1. Assume Love’s kitchen only produces cakes and roast chicken. A combination of 20 cakes and 60 roast chickens would appear
inside Love’s production possibilities frontier.
If at point A the economy makes 44K spoons and 58K forks, and at point B it produces 60K spoons and 44K forks, what is the opportunity cost of moving to point B?
12K forks
The circular-flow diagram:
Is an economic model that incorporates 2 types of decision makers: households and firms, and shows the flow of dollars and products, labeled as inputs and outputs
Another term for factors of production is
inputs.
the finances necessary for firms to produce their products.
the money households use to purchase firms’ output.
The production possibilities frontier is a graph that shows the various combinations of output that an economy
can produce.
Production Possibilities for Batterland
Pancakes Waffles
600 0
450 150
300 250
150 325
0 375
What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?
75 Waffles
An outward shift of a nation’s production possibilities frontier can occur due to
an increase in the labor force
What would cause the production curve to increase in one type of good while remaining constant in the other?
technological advance
What does an inefficient production curve look like?
One where the point is within the curve
