Chapter 2
Where would you plot full employment on a production possibilities frontier if all other resources are being used efficiently?
a point on the PPF
A production possibilities frontier with constant opportunity cost is
a straight downward sloping line
Where is unemployment such that employment is below the full-employment level plotted on a production possibilities frontier?
a point inside the PPF
yearly rainfall is what kind of factor?
exogenous
"Microeconomics is a great class." is what kind of statement
normative
Economists use the concept of ceteris paribus to examine a change in ____________ in a model, while assuming that all other variables remain constant.
one variable
The limiting of one's work to a particular area is referred to as
specialization
What is a decision an Italian restaurant owner makes in the long run?
the decision to stay in business
Suppose workers attend several skill-building workshops, increasing their labor productivity. How is this represented by a production possibilities frontier?
the entire PPF shifts out
The law of increasing opportunity costs states that
the opportunity costs rise as more of the good is produced.