Economists often use
graphs
to analyze the choices and trade-offs that people make. A production possibilities curve
Why do economics make graphs to analyze the choices and trade-offs people make?
Economists use graphs to analyze choices and trade-offs people make
because graphs help us see how one value relates to another value
. To draw a production possibilities curve, an economist must decide which goods or services to examine.
What do economists use to analyze the choices of a tradeoff?
The PPF graph
shows how resources must be shared among goods during the production process. The points of the graph show the trade -off that takes place between two goods. For example, if more of Good A needs to be produced, the amount of resources in use by Good B must be reduced and transferred to Good A.
How can we measure what we gain and lose when making choices?
How can we measure what we gain and lose when making choices? Economists use
an economic model known as the production possibilities frontier
to measure what we gain and lose when deciding how to use the factors of production in different ways.
What are resources used to make goods and services called?
Factors of production
are the resources people use to produce goods and services; they are the building blocks of the economy. Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.
What is a good example of a trade off?
In economics, a trade-off is defined as an “opportunity cost.” For example, you might
take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day's wages as the cost for that
opportunity.
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
.
What underutilization can produce economic growth?
What factors can produce economic growth? What is the impact of underutilization or resources? It can result
in a person/country spending more money,time,and effort than they would if
they just used the resources that are readily available.
What is the line that shows the maximum possible output an economy can produce?
that shows the maximum possible output an economy can produce is called
the production possibilities frontier
. product means that fewer resources are left to make something else.
Why do economists say all resources are scarce?
Scarcity exists because
there are limited resources to meet unlimited wants and needs
. Economists say all resources are scarce because: … A scarcity occurs when there are limited quantities to meet unlimited wants, and a shortage occurs when a good or service is unavailable.
Which is the best example of specialization?
When an economy can specialize in production, it benefits from international trade. If, for example, a country can produce
bananas
at a lower cost than oranges, it can choose to specialize and dedicate all its resources to the production of bananas, using some of them to trade for oranges.
How do individuals make choices?
When individuals make decisions,
they are necessarily deciding between taking one course of action over another
. In doing so, they are choosing both what to do and, by extension, what not to do. The value of the next best choice forgone is called the opportunity cost.
What are the 3 fundamental 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?
What are the 7 factors of production?
= h [7]. In a similar vein, Factors of production include
Land and other natural resources, Labour, Factory, Building, Machinery, Tools, Raw Materials and Enterprise
[8].
What is the use of resources in such a way as to maximize the output of goods and services?
1.
Efficiency
– using resources in such a way as to maximize the production or output of goods and services.
What is the most desirable alternative given up?
The most desirable alternative given up as a result of a decision is known as
opportunity cost
. Trade-offs are all the alternatives that we give up whenever we choose one course of action over others. Economists encourage us to consider the benefits and costs of our decisions.
