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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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This note was uploaded on 02/08/2009 for the course ECON 2030 taught by Professor Bong during the Spring '07 term at LSU.
- Spring '07