- Module 3.1: True or false? Explain your answer. a. An increase in the amount of...
- Module 3.2: Refer to the graph above to answer the following questions For this...
- Module 3.3: Refer to the graph above to answer the following questions. An incr...
- Module 3.4: Refer to the graph above to answer the following questions. Which o...
- Module 3.5: Refer to the graph above to answer the following questions. This pr...
Solutions for Chapter Module 3: The Production Possibilities Curve Model
Full solutions for Krugman's Economics for AP* | 2nd Edition
a large and sudden reduction in the demand for assets located in a country
goods that are excludable but not rival in consumption
the failure of majority rule to produce transitive preferences for society
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
a strategy that is best for a player in a game regardless of the strategies chosen by the other players
the property of distributing economic prosperity uniformly among the members of society
federal funds rate
the interest rate at which banks make overnight loans to one another
costs that do not vary with the quantity of output produced
goods produced abroad and sold domestically
income elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income
a good for which, other things being equal, an increase in income leads to a decrease in demand
a small incremental adjustment to a plan of action
the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior
negative income tax
a tax system that collects revenue from high-income households and gives subsidies to lowincome households
a person’s normal income
price elasticity of supply
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price
goods that are neither excludable nor rival in consumption
a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries
regulations on the minimum amount of reserves that banks must hold against deposits
velocity of money
the rate at which money changes hands