070307 - D433 M/1 G = 3 M per G E044 M/1 G = 4 M per G...

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Sheet1 Page 1 MicroEcon Notes --------------- US Economics organized on: Markets, Prices, and Property Rights Other systems: Command and traditional. Self-Interest (personal interest) vs. Social Interest (public interest) Command economies usually organized where personal and public interests clashed. Market economies organize where personal and public interests work together. Production Possibilities Frontier (Curve) -- PPF Shows the maximum goods and services an economy can produce Opportunity cost: The OC of an action is the next best alternative forgone (for example, with a decision between a taco, pizza , Poss.MachinesGumballsOpp. Cost A100 B91loss/gain (1 M/1 G) C72 2 M/1 G = 2 M per G
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Unformatted text preview: D433 M/1 G = 3 M per G E044 M/1 G = 4 M per G Opportunity cost changes because of the resources that are moved to the other sector, for example at the beginning resource s Law of Increasing Opportunity Cost: Moving along a PPF, the opportunity cost of an additional unit increases as the productio n Resources: Land, labor, capital, entrepreneurship. When resources or technology shifts, so will the PPF. For example, if more machines are produced, there will be more capital equipment the next year, so the PPF will shift outward s Three big economic questions as answered by PPF: What? The PPF shows the limit of of an economy's output How? Who? Doesn't say much...
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This note was uploaded on 04/13/2008 for the course ECO 2023 taught by Professor Rush during the Summer '08 term at University of Florida.

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