Reading/Study Guide - Chapter 1 – Limits, Alternatives, & Choices

Explain the following after reading Chapter 1

Define opportunity cost:

Explain marginal analysis:

What is microeconomics?

What is macroeconomics?

What is the difference between positive vs. normative economic statements?

What are the FIVE economics resources?

Explain the difference between consumer goods and capital goods:

Explain why investment in capital is best for long-term growth:

Draw a Production Possibilities Curve/Frontier (Short: PPC or PPF)  and label three points:

A= inefficient

B= efficient

C= currently unattainable

Explain the law of increasing opportunity costs.

Show economic growth using a production possibilities frontier: