Microeconomics Ch. 2 Parkin

The ________ _____________ ____________ is the boundary between those combinations of goods and services that can be produced and those that cannot.

To illustrate the PPF, the focus is on two goods at a time and all other goods and services are _________ ______________.

A PPF looks at a model economy in which everything remains the same (_______ ________) except the two goods been considered.

We achieve ____________ ____________ if we cannot produce more of one good without producing less of some other good

Points on the PPF curve are __________.

Points outside the PPF are _____________.

Points inside the PPF are ________________.

At a point ___________ the PPF, it is possible to produce more of one good without producing less of the other good.

At a point inside the PPF, resources are either ______________ or ___________.

Every choice along the PPF involves a __________.

Because resources are not equally ___________ in all activities, the PPF bows outward.

The outward bow of the PPF means that as the quantity produced of each good increases, so does its ____________ _______________.

True or False: The PPF does not determine opportunity cost.

The __________ ____________ of a good or service is the opportunity cost of producing one more unit of it.

The ___________ _____________ of a good or service is the benefit received from consuming one more unit of it.

We measure marginal benefit by the amount that a person is ___ ________ ______ for an additional unit of a good or service.

The more we have of any good, the __________ is its marginal benefit and the _____ we are willing to pay for an additional unit of it.
This illustrates the _______________ ______ _________ _______ ________.

The _________ we have of any good, the less we are willing to pay for an additional unit of it.

The _____ __________ curve shows the relationship between the marginal benefit of a good and the quantity of that good consumed.

When we cannot produce more of any one good without giving up some other good that we value more highly, we have achieved ____________ ___________.
We are producing at the point on the PPF that we prefer above all other points.

The point of allocative efficiency is the point on the PPF at which marginal ________ equals marginal _____.

A person has a(n) ____________ advantage in an activity if that person can perform the activity at a lower opportunity cost than anyone else.

A person has a(n) ________ advantage if that person is more productive than others.

Absolute advantage involve comparing _______ while comparative advantage involves comparing __________ __________.