econ lec 2

econ lec 2 - Chapter 2: SCARCITY AND CHOICE: THE ECONOMIC...

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1 Chapter 2: SCARCITY AND CHOICE: THE ECONOMIC PROBLEM Scarcity, Choice, and Opportunity Cost Economic Growth The Concept of Efficiency Specialization CHAPTER 2: SCARCITY AND CHOICE Economics : The study of the allocation of scarce resources to satisfy unlimited wants. The need to satisfy these unlimited wants has caused the development of markets and trade.
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2 Case 2.1: Robinson Crusoe Robinson Crusoe has 10 candy bars which he can use as bait to attract fish or birds. Case 2.1: A few facts 5 10 Catch per Candy Bar Birds Fish
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3 Case 2.1: Analysis: Case 2.1: Analysis An Example of Scarcity and Choice Production Possibilities Frontier Production Possibilities Frontier (PPF) = a graph showing the maximal different combinations of output for a given amount of inputs More of one good Æ less of another Illustrates opportunity costs in production (the slope)
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4 CHAPTER 2: SCARCITY AND CHOICE The Concept of Efficiency Efficiency
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This note was uploaded on 11/04/2009 for the course MUSIC 021 taught by Professor Gray during the Spring '09 term at UPenn.

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econ lec 2 - Chapter 2: SCARCITY AND CHOICE: THE ECONOMIC...

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