AP Micro Unit 1 Basic Economic
Concepts
Production Possibilities Curve - answersOnly two goods can be produced, full
employment of resources, fixed resources, fixed technology
Scarcity - answersSociety has limited resources but unlimited wants
On the outside of the curve, above it. - answersOn a PPG, impossible/unattainable is
located where?
Inside the curve, or below it - answersOn a PPG, inefficient/unemployment is located
where?
On the curve line or straight line - answersOn a PPG, efficient is located where?
Constant Opportunity Cost - answersmakes a straight line, resources are easily
adaptable for producing either good. perfectly substitutable.
Increasing Opportunity Cost - answersas you produce more of any good, the
opportunity cost will increase., makes a curved line, not substitutable.
How much each marginal unit cost = opportunity cost / units gained - answersEquation
for the Per Unit Opportunity Cost
Allocative Efficient - answersThe products being produced are the ones most desired by
society. Don't know where the point lies on a ppc
1) Change in resource quantity or quality
2) Change in technology
3) Change in Trade - answers3 Shifters of the PPC
Concepts
Production Possibilities Curve - answersOnly two goods can be produced, full
employment of resources, fixed resources, fixed technology
Scarcity - answersSociety has limited resources but unlimited wants
On the outside of the curve, above it. - answersOn a PPG, impossible/unattainable is
located where?
Inside the curve, or below it - answersOn a PPG, inefficient/unemployment is located
where?
On the curve line or straight line - answersOn a PPG, efficient is located where?
Constant Opportunity Cost - answersmakes a straight line, resources are easily
adaptable for producing either good. perfectly substitutable.
Increasing Opportunity Cost - answersas you produce more of any good, the
opportunity cost will increase., makes a curved line, not substitutable.
How much each marginal unit cost = opportunity cost / units gained - answersEquation
for the Per Unit Opportunity Cost
Allocative Efficient - answersThe products being produced are the ones most desired by
society. Don't know where the point lies on a ppc
1) Change in resource quantity or quality
2) Change in technology
3) Change in Trade - answers3 Shifters of the PPC
