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Unformatted text preview: (iii) Excludes what should be included 1. Next best alternative=get out of hs get hob 2. Is troon expense bigger than room expense in Livonia? a. No i. True opportunity cost = room in EL room in MtClemens) ~~0 ii. Opportunity cost after college earnings part time in college = 10/20000$ iii. Opportunity ost of college is large iv. College earnings>earnings in HS (3) Graphical tool: production possibilities frontier: just a graph in principal graphed in many dimensions but mostly 2. (a) Combinations of outputs that can be produced IF available resources used as well as possible (i) Efficient is not wasteful (b) Special case: 2 activities use same resources and technology (i) Green Frisbees and white Frisbees (ii) 500,500---800,2001000,0 to get one additional white, give up one green (iii) opp cost of one additional white = 1 g...
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- Spring '07