International Econ Chapter 3 (part three)

cmarquardt94's version from 2016-09-06 18:04


Question Answer
Every economy has limited resources, what does that mean?there are limits on what it can produce (trade-offs)
what is the PPF?shows the max amount (quantity) of a certain good that an economy can produce for a fixed amount of another good
How do you find the Labor Used in producing a good?(the amount of labor hours required to make one unit of the good) X (the number of that good that is produced)
What is the Production Possibility Frontier (PPF) determined by?the Limits of the Economy's Resources (Labor)
What resource does the Ricardian Model focus on?Labor!
What is the formula for finding the MAX amount of a good that cn be produced in an economy if they devote ALL their labor to producing that good?(total Labor Supply) / (Unit Labor requirement of that good)
What does it mean when the Production Possibility Frontier (PPF) is a straight line?means the Opportunity Cost of one good in terms of another is CONSTANT
How do you find the Opportunity Cost of one good in terms of another?opportunity cost of good1 in terms of good2 is: (unit labor req. for good1) / (unit labor req. for good2)