General Questions
PPC
PPC
The curve that illustrates the concept of opportunity cost
What is production possibilities curve (PPC)?
The reason the production possibility curve shifts
What is labor productivity
True or False: The country that can produce the most amount of a certain good has the comparative advantage in producing that good
False
Country C can produce 2 cars and 2 planes, so the opportunity cost of producing cars is ______
What is 1 plane?
Beneficial terms of trade will move a point on the PPC towards the _____ of the curve
What is outside?
The cause of a point to be illustrated outside of the PPC
Terms of Trade
Ways labor productivity changes
Technological advances, investment in human and physical capital
The country with the comparative advantage in producing a certain good has a ____ opportunity cost in producing that good
What is lower?
Countrylandia can produce 3 tables and 1 whiteboard, so the opportunity cost of producing whiteboards is _____
3 tables
To have beneficial terms of trade, countries with a comparative advantage in producing a certain product will ___ that product to other countries.
What is Export?
The PPC is equivalent to the ________ curve on the AD AS model
What is long run supply?
The location of a point that shows inefficient use of resources
What is inside the Production Possibilities Curve?
If country I has an opportunity cost of 2 oranges while producing apples, and Country T has an opportunity cost of 3 oranges while producing apples, country ____ has the comparative advantage in apple production.
What is I?
Franklandia can produce 10 phones or 5 computers, so the opportunity cost of producing phones is _____
What is 1/2 computers?
If country I has an opportunity cost of 3 planes for a train and country T has an opportunity cost of 5 planes for a train, then term of trade would make 1 train worth ____ planes.
4 planes
The reason why a PPC would be bowed-out
Increasing opportunity cost
The location of a point that shows an efficient use of resources
On the Production Possibilities Curve
If country I can produce 3 oranges or 4 apples, and country T can produce 2 oranges or 4 apples, then country ____ has the comparative advantage in producing apples.
What is T?
Landlandia can produce either 40 oranges or 60 apples, so the opportunity cost of producing apples is ______
2/3 oranges
Francia can produce 10 spoons or 15 forks
China can produce 15 spoons or 10 forks
So _____ should export spoons
What is China?
The reason why a PPC would be linear
Constant opportunity cost
______ is why an economy's PPC curve can only produce a certain amount of goods
What is Scarcity?
If country I has a comparative advantage in producing apples and can produce at most 20 apples, and country T can produce 5 oranges or 10 apples, then at most, country I can produce _____ oranges
What is 8?
France can either produce 525 shoes or 830 shirts, so the opportunity cost of producing shirts is ______
0.63 shoes
America can produce 100 planes or 255 trains
Franica can produce 125 planes or 245 trains
Acceptable Terms of Trade
One train = ___< ____(Round to the nearest whole number) <____ planes
1.96 < 2 < 2.55
So 2 planes for 1 train