LS3- Opportunity Cost and PPF

Question 1

Production possibility frontier

Answer 1

The maximum quantity of two goods or services a firm can produce using all their factors of production

Question 2

Opportunity cost

Answer 2

The benefit lost by not choosing the next best alternative

Question 3

Economic growth

Answer 3

An increase in the production of goods and services in an economy

Outward shift in PPF

Question 4

Negative economic growth

Answer 4

A decrease in the production of goods and services in an economy

Inward shift in PPF

Question 5

Consumer goods

Answer 5

Goods which do not produce other goods- used by consumers to satisfy their wants and needs

Question 6

Capital goods

Answer 6

Goods which are used to produce other goods and services

Question 7

Point on PPF

Answer 7

Efficient and complete usage of resources

Question 8

Point below PPF

Answer 8

An inefficient use of resources or underutilisation of resources

Question 9

Point above PPF

Answer 9

Unobtainable- need to improve quality and quantity of resources