Chapter 2 Flashcards
1
Q
3 Fundamental Economic Questions
A
What to produce?
How to product?
For whom to produce?
2
Q
Capitalism
A
market answers questions
3
Q
Communism
A
Government answers question
4
Q
Points on PPC
A
Best possible results from production
5
Q
Points inside PPC
A
are inefficient
6
Q
Points outside PPC
A
are impossible
7
Q
PPC Assumptions
A
Fixed amount of resources
Fixed Technology
Full employment of resources
8
Q
PPC - Economic Growth
A
resource^ tech^, shift outward
9
Q
Indication of more efficient in producing X/Y
A
Higher intercept value
10
Q
Increase Labor
A
Policy
Education
11
Q
Increase Land
A
Purchase land
12
Q
Increase physical capital
A
Investment > depreciation of physical capital
13
Q
Investment
A
Inflow of capital
14
Q
Capital
A
stock
15
Q
Depreciation of physical capital
A
worn-out machinery
irrelevant technology
