Lecture 4 Notes

Lecture 4 Notes - Another Factor that contributes to the...

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Lecture 4 Notes Law of increasing relative cost o Occurs when society wants to get greater amount of one product an ever- increasing amount of another product must be sacrificed o Gives the concave line of the production possibilities curve Causes of the shifting of the PPC (production possibility curve) is: o Labour o Technology
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Unformatted text preview: Another Factor that contributes to the shape of the PPC is the law of diminishing returns o Deals with the relationship between input/output o More specifically, it states that output will increase when the input increases, but only to a certain extent (ex. overcrowding of cooks in a kitchen can cause a decrease in output)...
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