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Unformatted text preview: o if resources are used efficiently. x Production possibilities are constrained by amount of labor and capital in the economy. x Cannot produce above PPF x If we shift labor from production of X and into production of Y, o less X will be produced o more Y will be produced x PPF summarizes opportunity cost of all such shifts. x If resources are not used efficiently o labor unemployment, o inefficient management x the economy is producing at a point below the PPF. Production Possibilities Frontier Page 29...
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This note was uploaded on 12/29/2011 for the course ECO 311 taught by Professor Willis during the Fall '10 term at SUNY Stony Brook.
- Fall '10