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Lecture 1

ECON 101 Lecture 1: Econ 101 Review Notes


Department
Economics
Course Code
ECON-101
Professor
Patrick Mc Guinness
Lecture
1

Page:
of 1
Econ 101 Review
Production Possibilities Curve/Function
At point A you are producing the maximum amount of Clothing and zero Food, At point F, you
are producing the opposite, Maximum amount of Food and zero Clothing. Could you produce at
any of these points on the curve? Yes of course!
The rest of the points resting on the curve indicate where a company might produce their
goods. At which point they produce their goods, depends on what the Economy calls for.
EX: If I produce at point D on the graph at a given time, I will be producing 30 food and say 32
clothing. I chose to produce at point D because that is what I can sell at that given time; it is
what the economy calls for. I would not produce 42 clothing and 20 foods Production if I could
not sell what I was producing.
My professor always asks the question If you owned this company, could you produce at point
X? The answer is yes, of course you can! Its your company, but will you produce at point X?
The answer to that is; well maybe, it depends on if thats what the market calls for or not.
Remember this is a production possibilities curve.
However, you could not be producing at point Y because you do not have the Resources to do
so.
Resources: Land, Labor, and Capital. Resources are what you need in order to produce goods or
services.