Chapter 2 Reading Guide

1.  Define the concept of opportunity cost.  Put this idea within the contexts of scarcity and tradeoffs.
2.  Define Law of Increasing Opportunity Cost.
3.  Illustrate an increasing opportunity cost PPC for the goods cars (x axis) and trucks (y axis)
a.  plot point "A" indicating fully utilized resources
b.  plot point "B" indicating idle/inefficient use of resources
c.  plot point "C" indicating an unattainable point of production.
4.  Review the rest of ch.2.  You should be familiar with this material from class.