An economy can increase the production of one good without reducing the output of another good if: there are no unemployed resources and the economy is operating within the production possibilities frontier
What basic economic questions must be answered in a barter economy in a primitive economy in a capitalist economy in a command economy?
In a command economy? All of the listed types of economies face the same three basic questions: what goods and services to produce, how to produce those goods and services, and for whom the goods and services should be produced .
Under what conditions is the production possibilities frontier linear rather than bowed out?
Under what conditions is the production possibilities frontier linear rather than bowed out? The production possibilities frontier will be linear if the opportunity cost of producing a good is constant no matter how much of that good is produced .
What conditions must be present for productive efficiency?
What conditions must be present for productive efficiency? Given available inputs and technology, it is impossible to produce more of one good without decreasing the quantity that is produced of another good .
Under what conditions would an economy be operating inside its PPF?
If there are idle or inefficiently allocated factors of production , the economy will operate inside the production possibilities curve. Thus, the production possibilities curve not only shows what can be produced; it provides insight into how goods and services should be produced.
What are the 3 key economic questions?
- What to produce? ➢ What should be produced in a world with limited resources? ...
- How to produce? ➢ What resources should be used? ...
- Who consumes what is produced? ➢ Who acquires the product?
Which point Cannot be attained with the current state of technology?
production possibility frontier . cannot be produced with the current state of technology. According to this figure the optimal point is: indeterminate from the information given.
What is a disadvantage of a market economy?
While a market economy has many advantages, such as fostering innovation, variety, and individual choice, it also has disadvantages, such as a tendency for an inequitable distribution of wealth, poorer work conditions, and environmental degradation .
(1) what to produce, (2) how to produce, and (3) for whom to produce . What is produced? based on custom and the habit of how such decisions were made in the past.
What are the 5 economic questions?
- What will be produced?
- How will goods and services be produced?
- Who will get the output?
- How will the system accommodate change?
- How will the system promote progress?
What is Mike’s OC of vacuuming in terms of washing dishes?
What is Mike’s opportunity cost of vacuuming in terms of washing dishes? Washing 2 loads of dishes . (60/30 = 2) other over. Mike vacuums a room for 60 min and washes a load of dishes for 30 minutes.
Why can’t a country have comparative advantage in both goods?
In international trade, no country can have a comparative advantage in the production of all goods or services. In economic terms, a country has a comparative advantage when it can produce at a lower opportunity cost than that of trade partners.
When countries trade with each other does it result in a gain for everybody?
According to this theory (also known as a law), as long as opportunity costs in two (or more) countries differ, it is possible for all countries to gain from specialization and trade according to their comparative advantage ; this results in an improvement in the global allocation of resources, resulting in greater ...
How do you tell if a firm is productively efficient?
A firm is said to be productively efficient when it is producing at the lowest point on the short run average cost curve (this is the point where marginal cost meets average cost). Productive efficiency is closely related to the concept of technical efficiency.
Do models perfectly mirror real world situations?
Select the correct answer below: Models perfectly mirror real-world situations. Models simplify real world interactions for the purposes of illustration . Models are used to test theories. Economic models are often in the form of graphs.
What causes productive inefficiency?
Productive inefficiency, with the economy operating below its production possibilities frontier, can occur because the productive inputs physical capital and labor are underutilized —that is, some capital or labor is left sitting idle—or because these inputs are allocated in inappropriate combinations to the different ...
