Micro

The Economic Problem CHAPTER 3 CHAPTER CHECKLIST When you have completed your piece of work of this chapter, you will be able to 1 excuse and exposit the concepts of scarcity, production efficiency, and tradeoff apply the production possibilities frontier. Calculate chance cost. Explain what makes production possibilities expand. Explain how people gain from long suit and trade. 2 3 4 1 3.1 exertion POSSIBILITIES fruit Possibilities Frontier issue possibilities frontier The boundary between the combinations of goods and gos that go off be fired and the combinations that cannot be produced, given the operational factors of production and the land of technology. The PPF is a valuable tool for illustrating the effectuate of scarcity and its consequences. 3.1 output POSSIBILITIES physical body 3.1 shows the PPF for cell phones and DVDs. Each sign on the graph represents a column of the table. The line finished the points is the PPF. 3.1 PRODUCTION POSSIBILITIES The PPF puts trey features of production possibilities in sharp concentre: pick upatable and unachievable combinations cost-effective and inefficient production Tradeoffs and leave office lunches 2 3.1 PRODUCTION POSSIBILITIES Attainable and Un come-at-able Combinations Because the PPF shows the limits to production, it separates attainable combinations from unattainable ones. Figure 3.2 on the close slide illustrates the attainable and unattainable combinations. 3.1 PRODUCTION POSSIBILITIES We can produce at both point inside the PPF or on the frontier. We cannot produce at any point outside the PPF much(prenominal) as point G. The PPF separates attainable combinations from unattainable combinations. 3.1 PRODUCTION POSSIBILITIES Efficient and Inefficient Production Production efficiency is a situation in which we cannot produce more(prenominal) of one good or service without producing less of something else. Figure 3.3 on the next slide illustrates the trait be! tween...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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