Unit 1 - Chapter 2

Unit 1 - Chapter 2 - Macroeconomics Chapter 2 Trade-offs...

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Macroeconomics Chapter 2 Trade-offs and the Market System
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The Production Possibilities Frontier The PPF is an economic model that can be  used to illustrate some basic economic  concepts: Scarcity Choice Economic growth
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Opportunity Cost Opportunity cost  is the highest valued  alternative that must be given up to  engage in an activity.  (It’s what you give up.)
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The Production Possibilities Frontier The PPF shows the maximum attainable amounts of  two products that can be made with available  resources. Points on the curve are efficient combinations. To move from one point to another, trade-offs must  be made. Points inside the frontier are inefficient. Points outside are impossible without growth.
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Production Possibilities Frontiers and Real-world Trade-offs Increasing Marginal Opportunity Costs 2 - 2 Increasing Marginal Opportunity Cost
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This note was uploaded on 05/06/2008 for the course ECON 112 taught by Professor Ramirez during the Fall '08 term at E. Stroudsburg.

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Unit 1 - Chapter 2 - Macroeconomics Chapter 2 Trade-offs...

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