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Unformatted text preview: #4 - Illustrate the concepts of tradeoffs, opportunity costs, and growth. A production possibilities curve is a graphical representation of opportunity cost and can be extended to illustrate the concepts of inefficiency and economic growth. #5 - Recognize that specialization and division of labor lead to higher output levels and living standards. The production possibilities curve can also be extended to illustrate the concepts of gains from specialization and division of labor. The law of comparative advantage and trade makes it possible to exploit mass production and innovative ideas. #6 - List societys three questions and specify the kinds of economic organizations. Every society must answer three questions: (1) what will be produced? (2) how will it be produced? (3) for whom will it be produced? There are two basic kinds of economic organization, market organization and political planning....
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