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Note Aug 31, 2022 3.pdf - chapter two: the economics...

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chapter two: the economics problemreview:define the production possibilities frontier and use it to calculate opportunity costdefine preferences and marginal benefit and describe an efficient allocation of resourcesexplain how specialization and trade make resource use more efficientexplain how current production choices expand future production possibilities, but change what we produce, and destroy and create jobsdescribe the economic institutions that coordinate decisionsPRODUCTION POSSSIBLITY AND OPPORTUNITY COSTproduction possiblities frontier: (ppf)is the boundary between those combinations if goods and services that can be produced/ those that can’tfocus on two goods @ a timecenter is paribuseverything remains the same, except the two goods we’re consideringshows thee PPF for two goods:colapizzaany point on the frointir is attainable:point B / point Eany point inside thee PPF is attainable:point Zany point outside the PPF isunattainableproduction efficiency:if we cannot produce more of one good without producing less of some other goodsall points on the ppf are efficient
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Economics, Opportunity Cost, Production possibility frontier

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