Question

Define and give unique example for the following term: (Please do not copy from textbook it needs to be in your own words)

Opportunity Cost

Positive and normative statments

Production possibilities frontier

Productive efficiency

Answer 1

opportunity cost

whenever there are alternative options available, then there exists a tradeoff. opportunity cost looks at that tradeoff. it is the amount of one good that we have to give up in order to acquire the other good

Positive and normative statements

normative statements are based on the judgement of the individuals. since everyone has their own opinions, they cannot be proven or disproven. Positive statements are based on facts, and hence they are verifiable

Production possibilities frontier

Let us say we have a set of 2 goods, that can be produced using given resources. A production–possibility frontier is a curve depicting different combinations of the set of two goods that can be produced such that the resources are fully as well as efficiently utilized

Productive efficiency

this refers to the situation of the economy in which it has maxed out its production abilities. in such a situation, the economy cannot produce an extra unit of output of a product without sacrificing output of another product