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Chapter_2

Chapter_2 - Chapter 2 • Note on graphing Appendix to...

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Unformatted text preview: Chapter 2 • Note on graphing: Appendix to Chapter 2 • Graph • A relationship between two or more things; can also be depicted in math and English Direct relationship Inverse relationship • X = independent variable • Y = dependent variable • A change in "x" causes a change in "y", this is called causation • Opportunity Cost Application: Internal Trade (take one) • Questions to Answer in Chapter 2 • If "workers in the United States are the most productive in the world," why do we consume so many imported goods? • They can consume more than their Production Possibilities Frontier • If "trade can make everyone better off," why is there so much opposition to it? • Tools: Production Possibilities Frontier (PPF); production = making stuff, possibilities = choices that are available to us at a point in time, frontier = border, limits [the limit to what we can do in terms of producing goods and services at a point in time] beer A F- - - - - - C- - - - - - - - - D E B pizza • The line connecting points A,B,C,D is called the Production Possibilities Frontier • Point F is unattainable because it lies outside of our PPF • Point E is attainable because it lies inside of our PPF • Efficiency • Getting the most out of the resources at one's disposable •...
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Chapter_2 - Chapter 2 • Note on graphing Appendix to...

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