L3X-economic-models-ppf jpw

L3X-economic-models-ppf jpw - Economic Models Trade-offs...

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microL3-F09- http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Economic Models: Trade-offs and Trade, the PPF Lecture 3 Jennifer P. Wissink ©2009 John M. Abowd and Jennifer P. Wissink, all rights reserved. January 26, 2009 (use for Sept. 3 since Wissink was away)
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microL3-F09- http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ The PPF: What you get Typical teaching set-up: Two final goods Two input goods and final goods technologies Frontier is a graph Frontier shows the maximum amount of one good you can produce given a fixed amount of the other.
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microL3-F09- http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ The Production Possibility Frontier – What’s it look like? Its location depends on the endowment of resources, the time frame and the state of technology and efficient production. It’s downward sloping WHY? » If you are efficient and at the frontier, you must give up “this” to get more of “that,” that is, there is a real cost! It’s typically “bowed-out” away
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L3X-economic-models-ppf jpw - Economic Models Trade-offs...

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