H02Tradeoffs - 1 Production Possibilities Simplified view...

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± Simplified view of economy ± 2 types of goods or economics activities ± alternative choices, production possibilities Production Possibilities 1 Good X Good Y A0 1 0 B5 9 C9 5 D1 0 0 B A C D 0 2 4 6 8 10 024681 0 Good X Good Y Production Possibility Frontier Production Possibility Frontier Production Possibility Frontier ± alternative combinations of goods that can be produced by the economy with given technology and fixed resources Good X Good Y 0 9 5 0 0 A C D 0 2 4 6 8 10 0 Good X ± cannot produce more of one good without producing less of the other B 1 Production Possibility Frontier Production Set Good X ± movement along the PPF shows tradeoffs in production ± goods are transformed by diverting resources from one use to another Production Possibility Frontier B A C D 0 2 4 6 8 10 0 1 Production Possibility Frontier
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Production Possibility Frontier Good X Good Y Old PPF ± movement along the PPF shows tradeoffs in production ± goods are transformed by diverting resources from one use to another ±
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This note was uploaded on 01/24/2012 for the course ECON 101 taught by Professor Gerson during the Fall '08 term at University of Michigan.

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H02Tradeoffs - 1 Production Possibilities Simplified view...

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