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Unformatted text preview: Resources are fixed Technology fixed 2 good Convex graph suggests that costs are increasing Straight line graph suggests that the costs are constant Concave graph suggests that costs are decreasing Capital manmade aids to production Changes In Capital Stock Gross Investment: total amount of capital produced Net Investment: Amount of capital available after replacing capital used up in production Can Cause production possibilities boundaries to move out: Positive net investment Changes in any resource Increases in the resource available Absolute Advantage Adam Smith (1776) wealth of nations Comparative Advantage David Ricardo (1817) Principals of Economics...
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- Spring '08