chapter 2 - Chapter 2 economics Scarcity unlimited wants...

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Chapter 2 economics Scarcity- unlimited wants exceed the limited resources available to fulfill those wants Production possibilities frontier o Curve showing maximum attainable combinations of 2 products that may be produced w/ available resources o points inside frontier are inefficient bc not all resources being used o points outside frontier are unattainable w/ current resources o opportunity cost- highest valued alternative that must be given up to engage in that activity increasing marginal opportunity costs o when move down prod possibilities frontier, experience increasing marginal opportunity costs bc some workers, machines, and other resources are better suited to one use than another o as a result, less things are produced o curve is therefore bowed outward rather than linear economic growth o shifts in production possibilities frontier o allow economy to increase production of goods and services which raises standard of living trade- act of buying and selling
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