10 Questions
What could have caused a society to move from inside its production possibilities frontier to a point on the frontier?
The society developed an improvement in technology.
If Elizabeth's opportunity cost is 20 Bread = 20 Apples, what is the exchange rate between Bread and Apples in her case?
1 Bread = 1 Apple
What is Brian's opportunity cost of acquiring 10 Breads?
30 Apples
When a society moves beyond its PPF due to technological advancements, what does this signify?
The society has improved its productive capacity.
In the context of a PPF model, what does opportunity cost represent?
The most highly valued alternative given up when a choice is made
How does specialization and trade impact a society's position relative to its PPF?
Specialization and trade move the society beyond the PPF.
What effect does an increase in resources have on a society's production possibilities frontier?
It shifts the PPF outwards.
If a society experiences an increase in quantity and quality of resources, how might this be reflected on its PPF?
The PPF will shift outwards, allowing higher production levels.
What role does unused resources play in relation to a society's position on the production possibilities frontier?
Unused resources indicate underutilization of available opportunities.
If a society moves from utilizing all its resources to having some unemployed resources, what potential impact could this have on its productivity?
It may decrease productivity due to underemployment of resources.
Test your knowledge on demand curves, the law of demand, and the concept of diminishing marginal utility. Understand why quantity demanded decreases as price increases and how marginal utility decreases with increased consumption.
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