DEFINITIONS
Individuals, businesses, and governments have unlimited wants but limited resources.
What is scarcity?
The shifters of the PPC curve.
What is change in resource quantity or quality, technology?
This person has a comparative advantage in rings?
Who is Isaac?
The next one or additional or incremental.
What is marginal?
All possible options given up when you make a decision.
What is a trade off?
Any point under the curve of the PPC.
What is a point of inefficiency?
This person has an absolute advantage in baskets.
Who is Isaac?
This is when you should continue consuming.
What is when marginal benefit is greater than marginal cost?
Economic system where the government owns the resources and decides what to make, how to make it, and who gets it. Total control of the economy.
What is a command economy?
This type of opportunity cost is represented by the graph.
What is increasing opportunity cost?
1 rings equals this many baskets for Isaac?
What is 1/4 baskets?
This is when you should never consume.
What is when marginal benefit is less than marginal cost?
Production of the combination of goods and services that provides the most net benefit to society. This is achieved when the MB=MC of the next unit.
What is allocative efficiency?
This is the point where the entire graph would shift with better resources for both products.
What is point C?
This person has a comparative advantage in producing baskets?
Who is Sarah?
This is when you should stop consuming.
What is when marginal benefit equals marginal cost?
This term describes when firms focus specialize and use their resources on production of a good at a lower opportunity cost than any other
What is comparative advantage
This is the opportunity cost from point B to D.
What is 15 pasta?
For this person, 1 baskets equals 2 rings
Who is Sarah?
This is the point on the graph at which you should stop consuming.
What is point B?