chapter 4 micro

possible opportunity costs of a recent high school graduate starting college right away

-Spending a year backpacking across Europe -Getting a full time job. -Using your college fund to buy a new car.

Your budget constraint for entertainment illustrates the concept of _____, since as you increase your purchases of one​ item, you must _____ your purchases of the other item

trade offs, decrease

If you produce at a point on your PPC​, then you are producing at a point that is​ ____________.

attainable and efficient

Suppose there are three activities in which you could​ participate: 1. The opportunity cost of the first activity is missing 3 hours of work. 2. The opportunity cost of the second activity is missing a concert that you have tickets to. 3. The opportunity cost of the third activity is missing the afternoon nap that you take every day. Given this​ information, for which of these activities would you be able to compare opportunity​ costs?

You can compare all the activities after you translate all the missed activities into dollar amounts.

A linear PPC would show ______ opportunity costs, and a PPC that is curved away from the origin would show ________ opportunity costs

constant, increasing

You would expect that the​ labor-force participation rate among highly educated women would be _____ than average, since the opportunity cost of not working for highly educated women is ______ than that of all women.

higher, higher

You would expect that the total fertility rate among highly educated women would be ______ than less educated​ women, since the opportunity cost of staying home to raise children is _______ for highly educated women.

lower, higher

On the Production Possibilities​ Curve, possible production levels are​ represented:

on any point on or below the curve

A production possibilities curve​ (PPC) ___________.

shows the relationship between the maximum production of one good for a given level of production of another good.

The concept of opportunity cost is a measure of ____

the value of the best alternative use of a resource

The opportunity cost of an activity is a measure of _______ when you do that activity.

what is given up