02+PPF+OppCost+Handout

02+PPF+OppCost+Handout - Production Possibilities u...

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1 u Simplified view of economy u 2 types of goods or economics activities u alternative choices, production possibilities Production Possibilities Good X Good Y A 0 10 B 5 9 C 9 5 D 0 B A C D 0 2 4 6 8 0 2 4 6 8 Good X Good Y Production Possibility Frontier Production Possibility Frontier u alternative combinations of goods that can be produced by the economy with given technology and fixed resources Good X Good Y A 0 B 5 9 C 9 5 D 0 A C D 0 2 4 6 8 0 2 4 6 8 Good X u cannot produce more of one good without producing less of the other B Production Possibility Frontier Production Set Good X u movement along the PPF shows tradeoffs in production u goods are transformed by diverting resources from one use to another Production Possibility Frontier B A C D 0 2 4 6 8 0 2 4 6 8 Production Possibility Frontier
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2 Production Possibility Frontier u movement along the PPF shows tradeoffs in production u goods are transformed by diverting resources from one use to another u the PPF shifts when other things change u
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02+PPF+OppCost+Handout - Production Possibilities u...

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