CHAPTER 4 PRODUCTION POSSIBILITY FRONTIERS

Question 1

Capital goods

Answer 1

Goods that are used in the production of other goods such as factories, offices, roads, machines and equipment.

Question 2

Consumer goods

Answer 2

Goods and services that are used by people to satisfy their needs and wants.

Question 3

Margin

Answer 3

A point of possible change.

Question 4

Production possibility frontier (also known as the production possibility curve or the production possibility boundary or the transformation curve)

Answer 4

A curve which shows that maximum potential level of output of one good given a level of output for all other goods in the economy.