EC 201 9-3-08 - o 3. Increases in Size + Quality of Labor...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
EC 201 9-3-08 Opp. Cost what you give up- some measured easily, some not Opp. Cost of coal-based electricity = wage of workers + cost of coal + cost of facility Explicit costs – but additional implicit costs Harder to measure – hurricanes – melting ice caps – emphysema – dead fish Production possibilities frontier- downward slope →scarcity + choice More of one; have to give up other o Wasteful=feasible o How to push out ppf (↑ productive capacity)? o 1. Technological Improvements A. improved processes for existing goods B. new goods o 2. Capital Investment-machinery – factory buildings- computers – railroad cars – delivery vans- office buildings – warehouses
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: o 3. Increases in Size + Quality of Labor Force More workers More skills human capital How to ppf inward? o 1348 Black Death o 1944 Germany hurricanes earthquakes wars o Slope of ppf + opp. Cost o Special resources + tech. same ppf straight o OC of 1 W = 1 G o OC of 1 G = 1 W o Sausage links + sausage patties o Same resources + tech. but patty is 2x as big 2 links = 1 patty o OC of 1 L = P OC of 1 P = 2 L - reciprocal relationship o OC of good on horizontal axis is slope ppf So far straight ppf constant slope constant OC More general case : resources + technology are specialized In general case of different resources + tech. ppf is concave principle of increasing opp. Cost OC of a good as we produce more + more...
View Full Document

This note was uploaded on 04/19/2011 for the course EC 201 taught by Professor Ballard during the Fall '08 term at University of Michigan.

Page1 / 2

EC 201 9-3-08 - o 3. Increases in Size + Quality of Labor...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online