A- Please explain Allocative Efficiency and how the point of AE is found. i. Define it, ii. Discuss the significance of allocative efficiency relative to the model iii. Explain the 2 step process for finding the point of allocative efficiency on the PPC.
B- On the topic of Economic growth: i. What does it mean? ii. How can it be graphically represented? iii. What are the prerequisites to Economic growth? iv. Why is Economic growth important? v. What factors tend to limit growth?
C. The Presentville – Futureville case: 1. Explain what motivates each group to make decisions. 2. Explain the impact of those decisions on the future of each group. 3. Explain the relevance of this case for the U.S. Economy.
D- What does this case teach you? . Law of increasing opportunity cost: 1. What does it tell us? 2. How could it be explained graphically? h. Explain how you could use the Production Possibility Model to represent the US Economy during 2008 – 2010.