Introduction - Thinking like an economist - The economist as scientist
7 important questions on Introduction - Thinking like an economist - The economist as scientist
Why does the PPF usually have a bowed out shape?
What does the slope of the production possibilities frontier tell us?
- The most efficient production possibilities.
When is an economy said to be efficient (see the PPF)?
- When an economy is using all its scarce resources efficiently.
- Points on the slope of the PPF are efficient outcomes.
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What does the shape of the Production Possibilities Frontier tell us?
What happens when a technological advancement, shifts the Production Possibilities Frontier outward?
What does microeconomics study?
- Philosophical.
Why is it important to consider microeconomics when studying macroeconomic developments?
It's important to first understand the individual resource allocations.
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