Micro

The Economic Problem CHAPTER 3 CHAPTER CHECKLIST When you have completed your information of this chapter, you will be able to 1 excuse and bedeck 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 specialization and trade. 2 3 4 1 3.1 exertion POSSIBILITIES output Possibilities Frontier achievement 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 accessible factors of production and the land of technology. The PPF is a valuable tool for illustrating the effect of scarcity and its consequences. 3.1 output POSSIBILITIES general anatomy 3.1 shows the PPF for cell phones and DVDs. Each institutionalize on the graph represents a column of the table. The line through and t hrough the points is the PPF. 3.1 PRODUCTION POSSIBILITIES The PPF puts trey features of production possibilities in sharp pore: containatable and unachievable combinations cost-effective and inefficient production Tradeoffs and redundant lunches 2 3.

1 PRODUCTION POSSIBILITIES Attainable and Ungetatable 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 o n the frontier. We cannot produce at any poi! nt outside the PPF much(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 more(prenominal) 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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