Guided Reading Activity 1-2 "Trade-Offs"

What benefit is there from a nation, business, or individual using the production possibilities curve?

A nation, Business, or individual can decide how best to use its resources.

What is important to know before a person makes a decision related to his or her available resources?

Be aware of trade-offs and their resulting opportunity costs.

What kinds of trade-offs do you make as a student?

Doing Homework, Playing games

What is a trade-off?

Exchanging one thing for the use of another.

How is a production possibilities curve useful?

It shows how much of each good is produced.

What is a production possibilities curve?

Shows the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time.

The classic example for explaining the production possibilities curve shows the relationship between what two factors?

The Trade-offs between military defense and civilian goods.

What does an opportunity cost cause a person to lose?

The ability to engage in your next highest valued alternative.