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Unformatted text preview: -opportunity cost is always rising because resources are not equally productive in all uses equation of opportunity cost= # units given up (forgone)/# units gained= cost per unit Cost of something=gained good-as you move up the curve, costs get more expensive Guns vs. Butter-Guns (defence)/Butter (Softer side of life) Economic Growth- in order to get economic growth, you have to give up what you have now X=consumer goods y= capital good-PPF overtime has ability to shift (economic growth) Trade Comparative advantage– ability to produce goods at a lower cost than any other producer-absolute advantage- when one producer is more productive than another in several or all activities-specialization- produce only the good in which you have comparative advantage/do what you do well and trade-trade- mutually beneficial activity that expands consumption possibilities, not production possibilities...
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This note was uploaded on 05/03/2011 for the course SPAN 110 taught by Professor Jones during the Fall '10 term at Saint Louis.
- Fall '10