unit 3- economic models and production possibilities

Question 1

all other conditions remaining the same

Answer 1

ceteris paribus

Question 2

a model to measure production trade-offs

Answer 2

the production possibilities frontier

Question 3

new technologies cause the ppf to…

Answer 3

shift outward to reflect a greater production capacity

Question 4

a major setback, like a natural disaster or resource shortage causes the ppf to…

Answer 4

shift inward to reflect a reduced production capacity

Question 5

all points along the production possibilities frontier signal that…

Answer 5

all pertinent resources are deployed

Question 6

all points outside of the production possibilities frontier signal that…

Answer 6

there are not enough resources to support that level of output

Question 7

all points inside of the production possibilities frontier signal that…

Answer 7

not all resources are deployed, this is considered inefficient.

Question 8

at point ‘a’, a country chooses to make 7 weapons and 2 schools.

at point ‘b’, that country chooses to make 6 weapons and 4 schools.

what was the opportunity cost of building 2 more schools?

Answer 8

one weapon

Question 9

at point ‘a’, a country chooses to make 7 weapons and 2 schools.

at point ‘b’, that country chooses to make 6 weapons and 4 schools.

if that country chooses to make just 1 more school, what would the opportunity cost be?

Answer 9

one half of a weapon

Question 10

when a country produces more of one good, over time the opportunity cost will

Answer 10

rise

more resources, including non-specialized assets, will be expended

Question 11

three primary resources that can affect the pff

Answer 11

land, capital, labor