Econ 1BB3 - Chapter 2 - Econ 1BB3 Chapter 2 Begins with...

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Econ 1BB3 - Chapter 2 - Begins with recognition that everything is scarce, goods and services are scarce and require trade-offs in-order to collect the most benefits - Trading with others - improves living standards of everyone Factors of Production - all inputs used to make a product Production possibilities frontier - curve showing the maximum attainable combinations of two products with available resources and current technology - most effective way to show what can be made and what can’t - *production graph - Toyota in example wants to make 500 suv by 500 sedans, however not obtainable by
graph data, so if wanted more sedans, more resources must be obtained - Opportunity cost applies to toyata’s alternatives to making as many cars as needed - Allocative Efficiency will determine how many each are made, ex. People want more sedans therefore more sedans will be made. *most look like this - Increasing marginal cost (when producing products require larger decreases to number of operations performed). - More resources devoted to an activity, the smaller the payoff devoting to additional resources to that activity. Ex. more studying on top of mostly done, only increase a lil

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