LS3 And LS4 - Oppurtunity Cost, PPF, Goods, Statements

Question 1

Opportunity cost

Answer 1

Value of next best alternative forgone

Question 2

Uses of Opportunity Cost

Answer 2

Consumers use it to decide what to spend incomes on
Producers use it to decide what and how to produce goods and services
Governments use it to decide what policies to choose

Question 3

PPF

Answer 3

Shows maximum potential output of a combination of two goods or services and economy can achieve when all its resources are fully and efficiently employment

Question 4

Economic Growth

Answer 4

Increase in the productive potential of economy, outward shift on PPF

Question 5

Negative Economic Growth

Answer 5

Decrease in production of goods and services in an economy, inward shift on PPF

Question 6

Consumer goods

Answer 6

Goods that don’t produce other goods, used to satisfy wants and needs

Question 7

Capital goods

Answer 7

Goods used to produce other goods and services

Question 8

Economy not on PPF….

Answer 8

If there is an inefficient use of resources or underutilisation of them

Question 9

Normative statements

Answer 9

Subjective statements, express opinions and can’t be proven true or false

Question 10

Positive economic statements

Answer 10

Can be proven true or false, objective