Econ Note - ECON1110 TA Section 2 Professor Jennifer...

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ECON1110 TA Section 2 Professor Jennifer Wissink TA Jingxian Zheng Jan 29, 2009 1 Concepts Review 1. Product Possibilities Frontier Position of PPF (e.g. outward shift) represents economic growth caused by acquiring new resources or new technology Curvature "bowed-out curve"- increasing MOC "straight line"- constant MOC 2. Marginal Opportunity Cost (MOC). "MOC of Gun in terms of Butter": MOC G = No. of units of B. Note: G is the horizontal axis in the PPF curve. MOC G = - slope ( PPF ) = 4 B 4 G 3. Comparative Advantage A producer produces the output at a lower MOC in terms of other goods forgone than the other producer. 4. Trade Definition of exchange rate: The price of one currency in terms of another. Barter: a type of trade in which goods or services are directly exchanged for other goods and/or services, without the use of money. So in Barter, exchange rate is the price of one good in terms of another. 2 Examples A, B, C produce and consume 2 goods: x and y. Given 60 hours of work in week for each person. A B C Max x 15 20 8 Max y 3 5 4 Assume all have straight line PPFs. (a)
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This note was uploaded on 09/19/2009 for the course ECON 101 taught by Professor Burkhauser during the Fall '08 term at Cornell University (Engineering School).

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Econ Note - ECON1110 TA Section 2 Professor Jennifer...

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