Production Possibilities Frontiers are concave to the origin because

due to the law of increasing cost's

What is the Opportunity Cost of Good X?

Change in good Y production/ Change in good X production

What is the Law of Increasing Cost?

Opportunity cost increases as production increases.

Used to cover farmland, crude oil, and machinery.

Using resources to maximum potential

What is Positive Economics?

Scientific methods including hypotheses being formed.

The law of increasing costs

is the result of resources not being adaptable two goods

Which one is Opportunity Cost?

Sacrificing one alternative to gain another.

What is Comparative Advantage?

Ability to produce something with a lower opportunity cost

What is Production Possibilities Frontier?

Combination of two goods produced if economy uses resources

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AP Microeconomics Unit 1

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AP economics midterm review questions

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Questions 10

Answers

1
Production Possibilities Frontiers are concave to the origin because
because of opportunity costs
due to the law of increasing cost's
The economies are inefficient
because of constant opportunity costs
2
What is the Opportunity Cost of Good X?
Change in good X production/ Change in good Y production
Change in X*Y production/ Change in X+Y production
Change in good Y production/ Change in good X production
Change in good X+Y production/ Change in X-Y production
3
What is the Law of Increasing Cost?
Resources moves perfectly from producing one good to another
Production rate increases as more opportunity cost are made.
Opportunity cost increases as production increases.
It is a straight line on the graph
4
What are Resources?
Used to cover farmland, crude oil, and machinery.
pencils, paper, glue, are examples of a resource
Resources make raw materials.
Included in labor, capital, land, entrepreneurship.
5
What is Efficiency
Production possibilities shows only actual output
Using resources equally distributed
Using resources to maximum potential
Actual output will be greater than potential output
6
What is Positive Economics?
Other than positive economics, there are normative&negative.
Positive and Normative relates to eachother
Scientific methods including hypotheses being formed.
Positive Economics include value judgements.
7
The law of increasing costs
causes the production possibilities frontier a straight line
implies that opportunity cost will rise as production falls
does not apply to guns and butter
is the result of resources not being adaptable two goods
8
Which one is Opportunity Cost?
Change in chosen option - Change in best option
Deciding want over need.
Selecting the best option for your life.
Sacrificing one alternative to gain another.
9
What is Comparative Advantage?
Comparing the best alternatives and seeking for advantages
Ability to produce something with a lower opportunity cost
Comparing advantages with other businesses
Losing customers to another competitor
10
What is Production Possibilities Frontier?
PPF assumes all inputs are inefficient
Points depicting the minimum output possibilities
There is no limit to production
Combination of two goods produced if economy uses resources

AP Microeconomics Unit 1 Flashcards | StudBud