Marginal Analysis
The relationship between marginal benefit and quantity is?
negative/inverse
Who benefits when people or companies specialize?
everyone
Where did Mr. McGinthy go to high school?
Mason
Marginal Benefit is:
the additional benefit associated with one more unit of an activity.
People have unlimited what?
desires
positive direct
if a company increases production of two products, what is the change to their opportunity cost?
there is no change opportunity cost is constant
Where did Mr. McGinthy go to to college
MSU
the additional cost associated with one more unit of an activity
if econ is not mostly about money, what is it about?
choices
goes down
If Canada can produce maple syrup at a lower opportunity cost than wheat, what should Canada specialize in?
Syrup
Green
suppose that, for studying econ, you have decreasing marginal benefits (in terms of your grade) and increasing marginal costs (in terms of how much you dislike studying) when you go to bed the night before your exam, you note that, for the last hour you spent studying, the marginal benefit of studying was less than the marginal cost. You did what?
you studied too much
opportunity cost is:
the value of the option not chosen
when quantity goes down, marginal cost does what?
goes down
If Country A can produce wheat at a lower opportunity cost than Country B, and Country B can produce cars at a lower opportunity cost than Country A, what should each country specialize in and why?
Country a should produce wheat and country b should produce cars, because they are giving up less to produce those products. The opportunity cost is lower.
What does Mrs. McGinthy do for work?
Teach
A company is considering hiring an additional worker, but the cost of hiring them exceeds the additional revenue the worker would generate. Based on marginal decision-making, what should the company do?
not hire the worker
a production possibilities model shows what?
possible combinations of two different goods or services that can be produced with fixed resources and technology
What happens if the marginal cost of producing a good exceeds the marginal benefit?
Production should decrease
What is the difference between comparative advantage and absolute advantage?
Absolute advantage means being able to produce more of a good with the same resources (or the same amount with fewer resources). It’s about who is most efficient overall.
Comparative advantage means being able to produce a good at a lower opportunity cost than someone else. It’s about who gives up less when they specialize.
What are Mr. McGinthy's sons names?
Finnegan and Jameson
Describe attainable and efficient points when considering a production possibilities graph.
Attainable: A set of goods that could be produced.
Efficient: An attainable set of goods where, when produced, there is no way to produce of one good without producing less of another good.
Double Jeopardy: draw the graph and label both points
If Jameson's opportunity cost of producing an apple is 3 pears, and Finnegan's opportunity cost of producing an apple is 1 pear. Who has the comparative advantage?
Finn