12 Questions
What is the opportunity cost of gaining 4.4 million tons of food at point E?
3.1 million housing units
In economics, what is the tradeoff referred to when moving from point E to point C?
Opportunity cost
What principle in economics applies to busy college students facing time constraints during finals?
Thinking at the margin
What does the example of a busy college student facing time constraints during finals illustrate about economics?
Thinking about tradeoffs in terms of one more hour
What is the central economic concept illustrated by the saying 'there is no free lunch'?
The central economic concept is tradeoffs.
What is the specific model for thinking about how a household or a country might produce more food?
The specific model is the production possibilities frontier.
What are models in the context of economics, and how do they help us think about economic issues?
Models are simplifications of the real world that help us think about economic issues, like the tradeoffs involved in producing more food.
What does the production possibilities frontier show in the context of producing more food?
The production possibilities frontier shows what can currently be produced given current resources (physical capital, labor, human capital, and technology).
What is 'thinking on the margin' referred to in economics?
Thinking about what one additional unit of something costs or takes.
How does the production possibilities frontier model relate to the long run?
It can shift in the long run due to changes in inputs and technology, representing economic growth or shrinkage.
What does the shift from point J to point K on the production possibilities frontier represent?
Economic growth.
What factors can lead to a shift in the production possibilities frontier in the long run?
Changes in inputs and technology.
Test your understanding of economic tradeoffs with this quiz about Yemen's production possibilities and opportunity cost. Explore the concept of tradeoff between food production and housing units.
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