Micro Econ

When the opportunity cost associated with increasing the production of one good or service in terms of another is constant at every level of production, then the production possibility frontier is:

Linear

___________ cost is visible in our everyday lives when spending more money on one thing means that less money can be spent on another thing.

Opportunity

The _________ of the production possibilities frontier equals the trade-off of the production of one good or service in terms of the other.

Slope

Combinations lying ________ the production possibilities frontier are impossible to produce with the current resources and technology.

beyond, outside, above, past, or over

When production is characterized by _______ opportunity costs, the resulting production possibilities frontier will be a straight line.

constant

The quality of a(n) _______________ , model can be measured by how well it reflects reality and whether it gives us insights that can be used in the real world. (Enter one word in the blank)

economic

When resources are allocated in such a way that it is possible to increase the production of one good only by decreasing the production of another, then the allocation of resources is said to be ___________

efficient

When resources are allocated in such a way that it is possible to increase the production of one good only by decreasing the production of another, then the allocation of resources is:

efficient.

When resources are ________ increasing the production of one good causes a decrease in the production of the other.

fixed

When resources are allocated in such a way that it is possible to increase the production of one good without decreasing the production of another, then the allocation of resources is:

inefficient

Each row of the production possibilities schedule illustrates the __________ amount of a good or a service that may be produced, given the production of the other good.

maximum

Combinations outside of the production possibilities frontier are:

not currently possible to produce.

Consider a production possibilities frontier (PPF) with Good X on the horizontal axis and Good Y on the vertical axis. The slope of the PPF tells us the _____ of producing one additional unit of Good X.

opportunity cost

Combinations inside the production possibilities frontier are:

possible but inefficient.

A table that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology is the:

production possibilities schedule.

The production possibilities frontier, or curve, is a graphical representation of the

production possibilities schedule.

Although points on the production possibilities frontier represent the different combinations of output, ultimately what they show is how we allocate our scarce ___________ to the production of two different goods or services.

resources

The points on the production possibilities frontier show how we allocate our scarce _____________ to the production of two different goods or services.

resources

A strong economic model allows us to analyze the economic events of the world by:

simplifying a very complex economic world.

When production is characterized by constant opportunity costs, the resulting production possibilities frontier will be a __ line.

straight

Individuals and countries specialize because the opportunity cost of producing goods and services:

varies.