Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
11 Cards in this Set
- Front
- Back
|
ECONOMICS FOR TEST #1
|
ECONOMICS FOR TEST #1
|
|
|
Define Production Possibilities Frontier
|
Used to illustrate scarcity, choices and growth
|
|
|
How do we derive Production Possibilities Frontier
|
from our country's supply of factors of production:
* Land - natural resources * Labor - people * Capital - financial resources, machines, etc. * Entrepreneurship - "the owner" |
|
|
Give some examples of Factors of Production using the "Subway" model
|
Land - lettuce, bread, tomatoes, turkey
Labor - employees Capital - Store, sandwich line, oven Entrepreneur - Doug Nelson |
|
|
FC#1: Explain what each of the points below illustrates as it pertains to Production Possibilities Frontier:
|
C1: Production all butter, no resources for guns
C2: All factors to produce guns, no butter B: Efficient combination of guns/butter: Full employment A: Ineffecient combination of resources to produce butter/guns D: unattainable combo guns/butter given current supply of factors of production |
|
|
FC#2: Explain each point as it pertains to production possibilities frontier as it illustrates choice and or opportunity cost:
|
A ---- B: "x" want more guns
B: unattainable combination of guns/butter. Not enough resources to produce combo B ---- C: "y" must give up gungs "y" butter to get "x" more guns |
|
|
Define Opportunity cost:
|
the value of the best alternative surrendered when a choice is made.
|
|
|
Goto FC#2 - what is the opportunity cost of "x" guns in that illustration
|
"y" butter
|
|
|
What must a country have in order for growth:
|
more factors of production: more factors allows for an increase in production of guns AND butter.
|
|
|
FC#3: Explain the following diagram as it pertains to Production possibilities frontier to illustrate growth
|
With an increase in the supply of factors of production, the country can have more guns and butter than before. EG: immigration, conquest, new discoveries
|
|
|
FC#4: Explain the following illustration as it pertains to production possibilities frontier growth and technology
|
Technology allows current supply of factors of production more effictively:
might not apply to all products or industries |
