AP GOV'T FREE RESPONSE

Define the term resources, and list the four categories of resources. What characteristic of resuorces results in the need to make choices?

A resources anything that can be used to produce something else like supplies. The four categories are labor, land, capital goods, and entrepreneurship. The characteristic of scarcity results in making these choices.

Define an expansion and economic growth, and explain the difference between the two concepts.

expansion is a period of recovery after an economic downturn economic growth is an increase in the productive capacity of the economy expansion can occur regardless of any increase in the economy's long-term potential for production, and it only lasts until the next downturn, while economic growth increases the economy's ability to produce more goods and services over the long term.

Country A and Country B produce the same two products, hammocks and looms. Country A can produce a maximum of 60 hammocks or 40 looms, while Country B can produce a maximum of 40 hammocks or 20 looms. (a) What is the opportunity cost to produce a loom in terms of hammocks in Country A? (b) Which country, if either, has a comparative advantage in producing looms? Explain. (c) Internationally, if 1 loom is traded for 1.75 hammocks, who will benefit from trading: Country A only, Country B only, both countries, or neither country? (d) Assume there is international trade. (i) Can a country produce beyond its production possibilities curve (PPC) ? (ii) Can a country consume beyond its PPC?

2/3 looms for each hammock. b. Country A, because it takes 1 ½ hammocks to produce a loom in country A, but 2 hammocks in country B. c. Both will benefit because 1.75 looms is more than they can produce for 1 hammock d. i. yes if there is a change in quantity or quality of resources, if there is a change in technology, or if there is a change in trade, then the country can produce beyond the PPC ii. yes consuming above their PPC will allow them man advantage in resources