⭐️INTRO TO ECON / SCARCITY / PPF
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10 Terms
What is opportunity cost?
The value of the next best alternative you give up when making a choice.
What does a PPF show?
Maximum combinations of two goods an economy can produce with given resources and technology.
What is an efficient point on the PPF?
A point ON the curve.
What is an inefficient point on the PPF?
A point INSIDE the curve.
What is an unattainable point on the PPF?
A point OUTSIDE the curve.
What does the slope of the PPF represent?
The opportunity cost of the good on the x-axis.
Why is the PPF sometimes bowed out?
Because of increasing opportunity cost.
What is a budget constraint?
Shows combinations of two goods a consumer can afford given income and prices.
What happens to a budget line when income changes?
It shifts outward or inward.
What happens to a budget line when price changes?
It pivots.
Note 
Flashcards (45)