Production Possibilities Frontier (PPF)
(Ans- a graph showing the alternate outputs an economy can produce
using its available technology and factors of production (scarce
resources)
Law of Increasing Opportunity Cost
(A
...
Production Possibilities Frontier (PPF)
(Ans- a graph showing the alternate outputs an economy can produce
using its available technology and factors of production (scarce
resources)
Law of Increasing Opportunity Cost
(Ans- as you produce more of a good, the opportunity cost will
increases resulting in a bowed PPF curve
Shift the PPF Curve
(Ans-
-Change in quantity or quality of resources
-Change in technology
Points inside the PPF Curve
(Ans- are inefficient or show unemployment because the output does
not equal the maximum possible ouput that could be made from the
resources available
Points outside the PPF Curve
(Ans- are unattainable because the output exceeds the maximum
possible output that could be made from the resources availableAbsolute Advantage
(Ans- the producer that can produce the most outputs or uses the least
amount of inputs/resources (more efficient)
Comparative Advantage
(Ans-
-The ability to produce a good at a lower opportunity cost than another
producer
-Producer should produce the item for which he or she has a
comparative advantage
-Cannot have this advantage for two goods
Law of Demand
(Ansa price increase causes the quantity demanded to decrease and a
decrease in the price of a good increases the quantity demanded
Market Demand
(Ansthe sum of the quantities demanded for each individual buyer at each
priceMarket Demand Curve
(Ans-
-The horizontal sum of the individual demand curves
-Shows the total quantity demanded of a good at each price
Demand Schedule
(Ansa table that shows the relationship between the price of a good and
the quantity demanded
Demand Curve
(Ans-
-A graph with the price on the vertical axis and the quantity demanded
on the horizontal axis
-Is downward sloping due to the law of demand
Quantity Demanded
(Ansthe amount of a good that buyers are willing and able to purchase
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