3 Complete each sentence with the correct ending, a-I, below.

1 With only three workers employed the economy is inefficient because

2 Point G is not on the curve because

3 More output of one good can be obtained only by sacrificing the output of the other good because

4 The point H is unattainable because

5 The society doesn´t choose the points lying inside the PPF because

6 The PPF doesn´t help to answer for whom question because

A the amount of resources is limited in the economy.

B this means unnecessary loss of output.

C points outside the PPF are said to be unattainable.

D employment resource is being wasted.

E economists need more information than a point on the PPF.

F the economy doesn´t sacrifice the output of food in favor of film output.

G at this point the society has no spare resources.

H the economy doesn´t have enough resources to produce this combination of output.

I point G is feasible but not efficient.

4. Complete the text using the words below (there are some extra words)

represent, primary, simultaneously, generalized, sacrificed, distribution, the supply, the demand,

feasible, satisfies, infeasible, efficiency, simplification

A PPF shows all possible combinations of two goods that can be produced (1___________________) during a given period of time, ceteris paribus. Commonly, it takes the form of the curve on the right. For an economy to increase the quantity of one good produced, production of the other good must be (2_________________). Let´s consider a hypothetical economy where butter production must be sacrificed in order to produce more guns. PPFs (3_______________) how much of the latter must be sacrificed for a given increase in production of the former.

Such a two-good world is a theoretical (4_______________), necessary for graphical analysis. If one good is of (5_______________) interest, all others can be represented as a composite good. In addition, the model can be (6__________________) to the n-good case using mathematics.

Assuming that (7_________________) of the economy's factors of production does not increase, making more butter requires that resources be redirected from making "guns" to making "butter". If production is efficient, the economy can choose between combinations (i.e. points) on the PPF.

Hence, all points on the curve are points of maximum productive (8_______________) (i.e., no more output can be achieved from the given inputs); all points inside the frontier are (9________________) but productively inefficient; all points outside the curve are (10___________________) with the given resources and thus unattainable in the short run. A point on the curve (11_________________) allocative efficiency, also called Pareto efficiency, if, for given preferences and (12_________________) of income, no movement along the curve or redistribution of income there could raise utility of someone without lowering the utility of someone else.

5 Fill in the missing words to complete the table: you can check your answers in a dictionary.

Verb	noun	adjective
Require	1	2
Sacrifice	3	4
5	restriction	6
Accept	7	8
Depend	9	10
Determine	11	12