Chapter 2 Flashcards
What is a production possibility table?
A production possibility table is a table that lists the trade-offs between two choices
What is an output?
An output is a result of an activity
What is an input?
An input is what you put in a production process to achieve an output
What is a production possibility curve?
A production possibility curve (PPC) is a curve measuring the maximum combination of outputs that can be obtained from a given number of inputs
What is product efficiency?
Productive efficiency is achieving as much output as possible from a given amount of inputs or resources
where is inefficiency?
Any point within the PPC represents inefficiency.
what is unattainable?
Any point outside the PPC is unattainable, given present resources and technology.
Society can produce more output if
Technology is improved,
More resources are discovered.
Economic institutions get better at fulfilling our wants.
outward shift
what does the PPC focus on?
The productive possibility curve focuses on efficiency and ignores distribution
what caused the growth in per capita in the past 200 years?
The growth in per capita income in the past 200 years is due mainly to markets and democracy.
What are the two gains of trade?
higher wages for workers in Bangladesh and
lower-priced cloth for U.S. consumers
What is globalization?
Globalization is the increasing integration of economies, cultures, and institutions across the world
what is a positive effect of globalization?
A positive effect of globalization is that it provides larger markets than the domestic economy
