lectur12-page40 - Consumer goods and services will be less...

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40 Point B: The economy has lots of capital goods and little consumer goods. The emphasis is on the long run and not on the short run. A large shift in the $Ag. vs. $Non-Ag. production possibilities is possible. In this case, the economy will have less present Consumer good consumption now than at point A but future Consumer good consumption will be more. Point B will make a lot of people unhappy in the short run.
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Unformatted text preview: Consumer goods and services will be less available and relatively expensive. WalMart and Kmart shelves may look like the day after a major snow storm or hurricane in the southeast. But, down the road, the quantity of consumer goods and services will increase and their price decrease as the economy starts to grow as new capital comes on line that will increase production possibilities....
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