Micro

The Economic Problem CHAPTER 3 CHAPTER CHECKLIST When you have completed your arena of this chapter, you will be able to 1 excuse and gild the concepts of scarcity, production efficiency, and tradeoff apply the production possibilities frontier. Calculate luck cost. Explain what makes production possibilities expand. Explain how people gain from distinction and trade. 2 3 4 1 3.1 exertion POSSIBILITIES achievement Possibilities Frontier employment 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 effect of scarcity and its consequences. 3.1 output POSSIBILITIES bode 3.1 shows the PPF for cell phones and DVDs. Each take on the graph represents a column of the table. The line done the points is the PPF. 3.1 PRODUCTI ON POSSIBILITIES The PPF puts trey features of production possibilities in sharp revolve around: hireatable and unachievable combinations cost-effective and inefficient production Tradeoffs and cease 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 un get-at-able ones. Figure 3.2 on the close slide illustrates the attainable and unattainable combinations. 3.1 PRODUCTION POSSIBILITIES We can produce at all point inside the PPF or on the frontier. We cannot produce at any point outside the PPF much(prenominal) as p! oint 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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