Week 4 - Revision

A desirable situation where resources are used for producing the particular types of goods and services that best satisfy society's needs and wants.

• Allocative Efficiency

• Technical Eficiency

• Productive Efficiency

• Possibility Efficiency

The most desirable alternative given up as the result of a decision

• Opportunity Cost

• Scarcity

• Efficiency

• Marginal cost

The Production Possibility Frontier (PPF) is a diagrammatical way to display

• Supply and demand

• Resource Availability

• Standard of living

• Opportunity Cost

How can an economy expand the PPF line outward?

• Reduce resources

• Additional resources

• Allocative Efficiency

• Productive Efficiency

A point within the PPF is....?

• Maximising resource efficiency

• Impossible to achieve

• Inefficient use of resources

• Technical efficiency

Task word - Distinguish question require ...

• Defining both terms and highlighting a difference between them

• Defining each term and listing an example

• Defining a term and listing the differences between the terms

• Listing the differences between the terms

A business has narrowed down the most viable investment option to (1) the construction of a new mine ($100 million) and (2) purchase of a $100 million shareholdings in a foreign mining firm. The opportunity cost associated with the construction of a new mine is which of the following?

• the $100 million spent on the construction of the mine

• the benefits that would have been provided by the $100 million shareholdings

• the dividends (share of profits) that would have been generated from the $100 million shareholding

• unknown since insufficient information is given

If a technically productive nation further improves efficiency via the introduction of new technology, then the change may be illustrated graphically on the PPF by...

• a movement along the PPF

• a shift outwards of the PPF

• a shift inwards of the PPF

• No movement from the PPF

Relative scarcity in economics means that

• The demand placed upon resources are scarce

• The demands placed upon resources are excessive when compared to the availability of those resources

• Resources available for use in production are limited

• Economics experience shortages of some factors of production

Which of the following is LEAST likely to push the PPF outwards in Australia?

• an increase in producivity

• a discovery of iron ore deposits

• Investment in a super fast broadband network

• a large decrease in the number of skilled migrants coming into Australia