January-18

January-18 - January 18, 12 Econ 203 Notes Chapter 1...

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January 18, 12 Econ 203 Notes Chapter 1 Continued Budget constraint – deals with an individual’s choice. Any spot within the attainable is acceptable. Production Possibilities curve – deals with an economy. The law of increasing opportunity cost makes PPC concave. You are more likely to send those more able to complete the job more efficiently FIRST. Optimal Allocation Increasing line the concept of increasing Marginal benefit (opportunity cost). Decreasing line is decreasing marginal cost. Make sure you didn’t leave any benefit on the table ** You keep expanding until the benefit is about the cost. The question is did you make the MOST profit? Companies want to keep pushing out the volume until they can’t expand anymore. ** -- Thinking about a growing economy A growing economy Economic growth More resources Improved resource quality Technological advances Things that once were not available or not available change during this time Present choices, future possibilities
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January-18 - January 18, 12 Econ 203 Notes Chapter 1...

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