Economics Concepts Flashcard

Front

What does a point inside the PPC represent?

Back

Inefficient use of resources.

Front

If the economy moves from producing 4 shoes and 7 robots to 6 shoes and 4 robots, what is the opportunity cost in terms of robots?

Back

3 robots

Front

If the PPC is linear, what does that indicate?

Back

It indicates constant opportunity costs.

Front

The above production possibilities frontier shows the available tradeoffs between consumption goods and capital goods. Suppose two countries face this identical production possibilities frontier.

Back

Both countries will have different opportunity costs.

Front

On a graph, what would the shift in the production possibilities frontier look like if there was an increase in technology that only affected the production of consumer goods?

Back

The curve shifts outward for consumer goods only.

Front

Assuming that resources are limited, which of the following scenarios best demonstrates an economic trade-off? A government decides to build a new highway instead of a new hospital. A bakery decides to stay open for 24 hours without changing its menu or prices. A student decides to take a gap year without considering the cost. A company offers free shipping to all customers without changing its return policy.

Back

A government decides to build a new highway instead of a new hospital.

Front

If a farmer decides to plant wheat on his land instead of corn, knowing that the land can only support one crop at a time, what is the opportunity cost of this decision?

Back

The profit that could have been made from planting corn.

Front

What causes the PPC to shift outward?

Back

Increased resources or technological advancements.

Front

Which point on the PPC represents full efficiency? Options: (10, 10), (2, 4), (8, 6), (6, 4)

Back

(6, 4)

Front

Using the graph, why does producing more shoes result in fewer robots?

Back

Resources must be reallocated from robot production to shoe production, causing a decrease in robots.