Trade Offs page 8
Page 8
What are trade-offs?
all the alternatives that we give up whenever we choose one course of action over another
Page 9
What is opportunity cost?
the most desirable alternative given up as the result of a decision
Page 10
What does thinking at the margin mean?
when you decide how much or less to do
Page 13
What does a production possibilities curve show?
shows alternative ways to use an economy's productive resources
Page 15
What is efficiency?
using resources in such a way as to maximize the production or output of goods and services
Page 8
Who makes trade-offs (name all 3)?
individuals, businesses, and the government
Page 9 fill in the 3 blanks
"Similarly, every ___________ decision that we make every day involves an ___________ ______."
ordinary
opportunity cost
page 10
What are the benefits of waking up early to study?
better grade on test
teacher and parental approval
personal satisfaction
page 14 and 555
What is the production possibilities frontier?
the line on a production possibilities graph that shows the maximum possible outcome for a specific economy
Page 15
What is underutilization?
using fewer resources than the economy is capable of using
What is a trade-off that you have made?
answers will vary,
ie. give up playing football to go out on a date with my girlfriend
Page 9
Why do people use a decision making grid?
when a decision's opportunity cost may be unclear or complicated
Page 10
What is the opportunity cost of sleeping late?
extra study time
page 15 Trade-Offs (fill in the 5 blanks)
"Using the ______ __ _______ to make one _______ means that fewer ________ are left to make something else."
factor of production
decision
resources
Page 16
What is cost?
the alternative we give up when we choose one option over another
Give an example of a business trade-off.
Answers will vary
ie. Framers must choose to grow broccoli or cauliflower
Page 9
What 2 things does the Viking in the cartoon have to consider when deciding "TAKE IT" OR "LEAVE IT"?
trade-offs and opportunity cost
Page 10 fill in the 4 blanks
"Making a ______ about each extra hour would mean that she was ______ __ ____ ________."
decision
thinking at the margin
Page 15
What 3 important pieces of information does a production possibilities curve provide?
2. Whether an economy has grown or shrunk
3. opportunity cost of a decision to produce more of one good or service
Page 17
What does the law of increasing costs states?
It states that as production switches from one item to another more and more resources are necessary to increase production of the second item, which increases the opportunity cost.
Give an example of a government trade-off
answers may vary
guns or butter
Page 9 Global Connections
How can the same decision made by 2 different countries have such vastly different opportunity costs?
because some countries have more money than others and they can afford more without losing money for other important things.
Page 11
Why did Karen decide to wake up 2 hours early to study?
At three hours, the cost is no longer worth the benefit to Karen because her grade will only improve slightly.
Growth page 16
Where are the categories or specific goods or services located on the Production Possibilities Curve?
horizontal and vertical axes
page 18
Which country has 382.2 computers per 1,000 people?
Japan