ECON103 Lecture Notes - Lecture 3: Sith, Absolute Advantage, Comparative Advantage
23 Feb 2017
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Chapter 2 trade-offs, comparative advantage, and the market system. The production possibilities frontier (ppf) shows the maximum attainable combinations of two goods that can be produced with available recourses and technology. To produce more sedans, tesla must reduce the number of suvs. Some resources are better suited to one task than another. The first resour(cid:272)es to (cid:862)s(cid:449)it(cid:272)h(cid:863) are the o(cid:374)e (cid:271)est suited to switching. The more resources already devoted to an activity, the smaller the payoff to devoting additional resources to that activity. Figure 2. 3 outward shift of the ppf (economic growth) Shifts in the production possibilities frontier represent economic growth (decline) Economic growth the ability of the economy to increase the production of goods/services. As more economic resources become available, the economy can move from point. A to point b, producing more tanks and more automobiles. You and your neighbor each have a limited time to pick apples and/or cherries.
