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Unformatted text preview: 1-9-08 Chapter 2 1. production possibilities frontier a. give up one to produce other b. trade off (give up to get something else) c. graph can be used and see if one is different 2. production efficient a. we can’t get more unless we give up some other b. because can’t just make one, must give up 3. capital accumulation a. growth of capital resource, including human capital b. one way to produce more c. shift PPF out 4. technological change a. development of new good, development of better ways of producing good and services b. efficient ways 5. economic growth a. expansion of production possibilities result from capital accumulation and technological change b. increase one good without decrease other c. PPF shift out d. Usually shift out as time by 6. absolute advantage a. A person has an absolute advantage if that person is more productive than another person. b. Better compare to other c. Wins both of products 7. comparative advantage a. producer can perform the activity at a lower opportunity cost than any other producer b. lower opportunity cost should produce 8. allocative efficiency a. can’t produce more of any good without giving up some of another good that we value more highly b. Marginal Benefit = Marginal Cost (Perfect!!!~!!!!) *as we have increase in wine production leads to an increase in opportunity cost of producing wine (we don’t have homogeneous, some good for something) *slope PPF gives the opportunity cost First have productive efficiency then allocative - If you have both then you’re perfect so it does not move ...
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This note was uploaded on 12/02/2009 for the course ECON econ taught by Professor For got during the Spring '09 term at UCSD.
- Spring '09
- for got