E2

Question 1

Production possibility frontier

Answer 1

Production possibility froniter shows the maximum production combination given a fixed quantity of resources and technology level.

Question 2

Slope of production possibility frontier

Answer 2

Constant Marginal cost

Question 3

Why does production possibility curve concave to the origin?

Answer 3

Because the marginal cost of producing the goods are increasing

Question 4

Explain where both countries will gain from trade

Answer 4

Yes, because the maximum consumption possibility increase after trade for both countries

Question 5

How to determine which country of comparative advantage in curve graph

Answer 5

If terms of trade is larger than opportunity cost then have comparative advantage and X
If opportunity causes larger than terms of trade then have comparative advantage in Y
越平越細 flatter the smaller the angle

Question 6

Keep in mind

Answer 6

PPF=CPF1
P1=C1
But after trade,
CPF2=TOT
P2
C2

Question 7

Healthy life

Answer 7

Life expectancy at birth (human development index focusing on economic development)

Question 8

Education

Answer 8

X expected years of schooling ( economic development and human development index)

Question 9

Standard of living

Answer 9

Measured by grass national income per
Capita (focus in economic development and economic growth of human development index)