review - What is the meaning of production function It is...

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What is the meaning of production function? It is the land, labour, capital and entrepreneur Production Possibility line – budget line Budget line is a line that shows the different combinations of two products a consumer can purchase with a specific money income. The budget line shows everything that is attainable and what isn’t. The location of the budget line varies with income: increase in income shifts it to the right and vice versa. Slope of the line is (price of item x)/(price of item y) to figure out how much you can have. Also has to do with opportunity curve. Budget line also shifts with price changes of the products: increase in price of both products shifts it to the left (and v.v.) What really is efficiency? What do you get? How do you achieve it? Productive efficiency is to produce your product in the least costly way, keeping the av. Cost of production at a minimum. Allocative efficiency is when you distribute resources amongst an economy is such a way that you produce products demanded. This
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