18 Questions
What is the concept that economic agents must consider when making decisions due to limited resources?
Opportunity cost
In the context of the text, which factor of production involves managerial ability and taking risks?
Entrepreneurship
Which type of resource includes oil, coal, and water?
Natural resources
What do producers have to choose between in the example provided in the text?
Hiring extra staff or investing in new machines
Which term describes finished or semi-finished consumer goods in the production process?
Working capital
Which factor of production involves the physical goods used in the production process?
Capital
What happens when an economy experiences an increase in the quantity or quality of resources?
The productive potential of the economy increases
How does moving along the PPF differ from shifting the PPF?
Moving along the PPF involves a change in the state of resources
Which type of goods can be used to produce other goods?
Capital goods
What is a common reason for a country's PPF curve to shift inwards?
Brain drain or natural disasters
In the context of PPF, what does specialization refer to?
Completing specific tasks in production
How does shifting the PPF curve outwards affect the opportunity cost of producing goods?
Reduces the opportunity cost
Why did Karl Marx view the free market as unstable?
He believed profits were created through the exploitation of labor.
In a command economy, who determines 'what to produce'?
The government
What is one advantage of a command economy over a free market economy?
Easier coordination of resources during crises
What is a key disadvantage of a command economy according to the text?
Governments may not be fully informed on what to produce.
Which economic system combines features of both command and free economies?
Mixed economy
How does a mixed economy differ from a command economy?
'What to produce' decisions are shared between government and market forces.
Understand the concept of opportunity cost and its significance for economic agents like consumers, producers, and governments. Explore how decisions on resource allocation are made due to limited resources. Learn about the factors of production including capital, entrepreneurship, and more.
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