CH-3 PPT - Chapter3 Interdependence and the Gains from...

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Interdependence and the Gains from Trade M icroeconomics P R I N C I P L E S   O F P R I N C I P L E S   O F N. Gregory Mankiw N. Gregory Mankiw Chapter 3
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Country I (100 workers) Output Per Worker Food 20 Autos 5
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Country I Auto Workers Auto Production Food Workers Food Production 0 0 100 2,000
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Country I Auto Workers Auto Production Food Workers Food Production 0 0 100 2,000 100 500 0 0
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Country I Auto Workers Auto Production Food Workers Food Production 0 0 100 2,000 100 500 0 0 50 250 50 1,000
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Country I Auto Workers Auto Production Food Workers Food Production 0 0 100 2,000 100 500 0 0 50 250 50 1,000 25 125 75 1,500
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The production possibilities frontier (PPF) is a graph that shows the combinations of output that the economy can produce given the available factors of production and the available production technology. Production Possibilities Frontier
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Food Autos 2,000 500 B A Slope = 4
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opportunity cost of an item is whatever must be given up to obtain that item. Opportunity Cost
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This note was uploaded on 09/25/2011 for the course BMGT 220 taught by Professor Bulmash during the Spring '08 term at Maryland.

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CH-3 PPT - Chapter3 Interdependence and the Gains from...

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