PPC Flashcards
1
Q
What is opportunity cost?
A
The next best alternative when making a choice
2
Q
What is a PPC
A
It shows the max amounts of goods and services that can be produced
3
Q
What is a PPC for
A
Helps in decision making in an economy
4
Q
What does a point on the ppc mean
A
All resources are being used efficiently
5
Q
What does a point below the curve mean
A
Goods are being used in efficiently
6
Q
What does a point above the curve mean
A
It is impossible as there aren’t enough resources
7
Q
What does a straight line mean on a ppc
A
Constant opportunity cost
8
Q
What does an arch on a ppc mean
A
Increasing opportunity cost
9
Q
What is the law of increasing opportunity cost
A
When one good or service is made it leads to greater forgone production of the other
