Table of Contents
- 1 What is the biggest factor that leads a country to specialize in certain products?
- 2 What do we call all the alternatives that we give up whenever we choose one course of action over others?
- 3 Why is trade between countries important?
- 4 What is the process of choosing which wants among several options will be satisfied?
- 5 What do you call all the alternatives that you give up or sacrifice when you make your decision?
- 6 What determines the shape of a country’s PPF?
- 7 When do countries need to trade with each other?
- 8 Why are countries more efficient when they specialise?
What is the biggest factor that leads a country to specialize in certain products?
Comparative advantage drives countries to specialize in the production of the goods for which they have the lowest opportunity cost, which leads to increased productivity.
What is giving up one alternative for another called?
Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost,” we usually mean opportunity cost.
What do we call all the alternatives that we give up whenever we choose one course of action over others?
All individuals and groups of people make decisions that involve trade-offs. The most desirable alternative given up as a result of a decision is known as opportunity cost. Trade-offs are all the alternatives that we give up whenever we choose one course of action over others.
What is a graph that shows a country’s production possibilities called?
The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology. Sometimes called the production possibilities frontier (PPF), the PPC illustrates scarcity and tradeoffs.
Why is trade between countries important?
Trade increases competition and lowers world prices, which provides benefits to consumers by raising the purchasing power of their own income, and leads a rise in consumer surplus. Trade will also encourage the transfer of technology between countries.
What countries have comparative advantage?
For example Ireland has a comparative advantage in cheese and butter due to climate and a large amount of land suitable for dairy cows. China has a comparative advantage in electronics because it has an abundance of labor.
What is the process of choosing which wants among several options will be satisfied?
The process of choosing which wants, among several options, will be satisfied is called economic decision making. In a traditional economy, goods and services are produced the way they have always been produced.
When a society chooses to use a resource for one purpose and gives up the opportunity to use it for some other purpose what cost is involved?
In order to use a scarce resource, you are inherently using the resource for one purpose and not an alternative. The cost of using a resource is called the opportunity cost: the value of the next best alternative that you could be using the resource for instead.
What do you call all the alternatives that you give up or sacrifice when you make your decision?
trade-off. *an alternative that we sacrifice when we make a decision/alternatives that we give up whenever we choose one course of action over another. *the most important sacrifice that results from making a decision.
What is it called when the government makes all the economic decisions?
A centrally planned economy, also known as a command economy, is an economic system in which a central authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products.
What determines the shape of a country’s PPF?
A production possibilities frontier defines the set of choices society faces for the combinations of goods and services it can produce given the resources available. The curvature of the PPF is likely to differ by country, which results in different countries having comparative advantage in different goods.
What economic data does the PPC bring together?
A PPC brings together data regarding what combinations of products is the maximum that can be feasibly produced in the economy given limited resources.
When do countries need to trade with each other?
Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.
How does the United States compare to other countries?
The United States, for example, has a combination of a privatized system and a public system. Other countries like Canada, Japan, and most European countries have universal health care, which means that all its citizens receive a basic level of coverage, though the governments of the countries can choose to run the program in a variety of ways.
Why are countries more efficient when they specialise?
When countries specialise they are likely to become more efficient over time. This is partly because a country’s producers will become larger and exploit economies of scale. Faced by large global markets, firms may be encouraged to adopt mass production, and apply new technology.
Are there any other countries that have universal healthcare?
Other countries like Canada, Japan, and most European nations have universal health care, which means that citizens have access to a basic level of coverage, though each government can choose to run the program in a variety of ways.