Describe the differences between tradeoffs and free lunches in terms of a PPF
What will be an ideal response?
A tradeoff is a constraint or limit that forces giving up one thing in exchange for something else. When resources are fully employed, a country operates on its PPF. Any movement from one point to another point along the PPF requires the country to make a tradeoff between the two goods because one good is given up to get some other good. A free lunch occurs when some resources are not being used or not being used in their most productive way. When a country operates inside its PPF and moves toward its PPF choosing a different combination of goods, the country enjoys a free lunch. It does not face a tradeoff.
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Which of the following is true?
A) Profit as calculated by accountants and economic profit are not necessarily equal. B) Profit as calculated by accountants is always smaller than economic profit. C) Economic profit ignores implicit costs. D) The Internal Revenue Service taxes the firm's economic profit but not its normal profit. E) The Internal Revenue Service taxes the firm's normal profit but not its economic profit.
How do banks create money?
What will be an ideal response?
"Inside information" is the use of information
A) by those who read the companies' annual reports. B) by those who write the companies' annual reports. C) by stockbrokers at the largest brokerage firms. D) that is not available to the public.
The real problem for people in many _______________ countries is not that globalization through international trade has made their lives worse, but rather that they have so few good employment alternatives.
a. low-income b. high-income c. large d. small