Question

Econ 110 Principles of Macroeconomics Spring 2020 HW2 1. The opportunity cost of an economic model is known as the: measureinent of time. variables that can be included. measurement of money and time. exclusion of real-world complications, 2. The is an economic model that shows the limit of what an economy can produce when all resources are used efficiently. circular flow inodel production possibilities frontier model opportunity cost model law of increasing costs Video Games (thousands per day) 2 9 12 Cell Phones (thousands per day) 3. Refer to figure above. If this economy is producing 4,000 video games, what is the opportunity cost of 2,000 more video games? 1,000 cell phones b. 3,000 cell phones 6,000 cell phones 9,000 cell phones cost is what is given up in order to acquire or do something else. Opportunity Marginal Maximum Minimum

Answer 1

1. Option D

Explanation: An economic model is a simple representation of the reality.

2. Option B

Explanation: The production possibility frontier shows the potential output level in an economy.

3. Option B

Explanation: In that case the economy will produce 3,000 less cell phones.

4. Option A

Explanation: Opportunity cost is what is given up to get something else.