1. As long as resources are scarce, a PPF will slope downward because?
Producing more of one good always means producing less of another
2. Equation for Opportunity Cost
Quantity given up
3. The opportunity cost is the same as the absolute value of the slope of the
4. Along a linear PPF with a constant slope, the opportunity cost is constant
and is measured by the slope of the PPF.
5. When the opportunity cost is increasing, the PPF has a distinctive concave
or bowed out shape.
6. With an increase in available productive resources or advance in
technology, the production set ______.
7. One person cannot have a comparitive advantage in the __________
Production of both goods
8. Using comparative advantage, each country should produce and export
good for which its domestic opportunity costs are ____ than the domestic
opportunity costs of other nations
9. Countries should buy and import from other nations those goods for
which its domestic opportunity costs are ______ than domestic opportunity
costs of other nations
Higher 10. A graph showing the maximum attainable combinations of 2 goods that
an economy can produce using its available productive resources (labor,
capital and natural resources) and its available technology.
Production possibilities frontier (PPF)
11. Producing in a way that best uses all of the economy's resources
12. The cost of a good expressed as the best alternative that must be given
up in order to have that good
13. The ability to produce more goods n an economy, represented by an
outward shift of the PPF
14. The set of all attainable combinations of goods, both on and inside the
15. The ability of an individual, company or country to produce more of a
good or a service using the same amount of productive resources
16. The ability of an individual, company or country to produce a good or
service at a lower opportunity cost than its competitors
17. Goods and services purchased from a foreign country