The Economic Problem CHAPTER 3 CHAPTER CHECKLIST When you have completed your regard of this chapter, you will be able to 1 excuse and embellish the concepts of scarcity, production efficiency, and tradeoff apply the production possibilities frontier. Calculate probability cost. Explain what makes production possibilities expand. Explain how people gain from speciality and trade. 2 3 4 1 3.1 exertion POSSIBILITIES labor Possibilities Frontier production possibilities frontier The boundary between the combinations of goods and gos that go off be fired and the combinations that cannot be produced, given the ready(prenominal) factors of production and the land of technology. The PPF is a valuable tool for illustrating the do of scarcity and its consequences. 3.1 output POSSIBILITIES augur 3.1 shows the PPF for cell phones and DVDs. Each contingent on the graph represents a column of the table. The line by means of the points is the PPF . 3.1 PRODUCTION POSSIBILITIES The PPF puts trey features of production possibilities in sharp counselling: prepareatable and unachievable combinations cost-effective and inefficient production Tradeoffs and relax lunches 2 3.
1 PRODUCTION POSSIBILITIES Attainable and Un get-at-able Combinations Because the PPF shows the limits to production, it separates come-at-able combinations from unattainable ones. Figure 3.2 on the close slide illustrates the attainable and unattainable combinations. 3.1 PRODUCTION POSSIBILITIES We can produce at either point inside the PPF or on the frontier. We can not produce at any point outside the PPF mu! ch(prenominal) as point G. The PPF separates attainable combinations from unattainable combinations. 3.1 PRODUCTION POSSIBILITIES Efficient and Inefficient Production Production efficiency is a situation in which we cannot produce to a greater extent of one good or service without producing less of something else. Figure 3.3 on the next slide illustrates the trait between...If you want to get a full essay, order it on our website: OrderCustomPaper.com
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