Dolorium - Study guides, Class notes & Summaries

EC 231 Ch. 3 Homework Correctly Solved. Suppose Bulgaria produces only smartphones and tablets. The resources that are used in the production of these two goods are not specialized—that is, the same set of resources is equally useful in producing both tablets and smartphones. The shape of Bulgaria's production possibilities frontier (PPF) should reflect the fact that as Bulgaria produces more tablets and fewer smartphones, the opportunity cost of producing each additional tablet (rema...

Economics is the study of how society manages its scarce resources. This includes studying how people make decisions and interact with one another, and the effects this has on the economy as a whole. The opportunity cost of an item is what you give up to get that item. In this case, the opportunity cost of going to a movie includes both the total cash expenditure needed to go to the movie plus the value of the time you gave up in order to watch the movie. Economists use the term margin...