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Unformatted text preview: A PPC represents the combination of two goods that an economy can produce at full output with available resources and technology. This economy of citrus and flowers has a straight PPC the resources used for flowers and citrus arent necessarily better suited for either. Both only need the warm climate and fertile land to grow on. The freezing temperatures are causing the raw resources (flowers and fruit) to die, a reduction of available resources. In this situation, the available resources of each product (fruit and flowers) are falling and concurrently, the maximum output of each good will fall which graphically is an inward shift along both the x (citrus) and y (flowers) axis. Flowers PPC: Flowers v. Citrus in California Kocher 2 F max F 1 Combination of goods at full production given available resources and technology (before climate change) (After climate change) Citrus...
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- Fall '08