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ECON 1B03 (523)
Lecture

Chapter 2

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Department
Economics
Course
ECON 1B03
Professor
Hannah Holmes
Semester
Fall

Description
ECON 1B03CHAPTER 2Tuesday Sept13 2011Chapter 2 Production PossibilitiesThe Production Possibility FrontierThe production possibilities frontier PPF is a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technologyIt shows the best an economy can do if it uses all its resources efficiently given the current technologyNOTE the PPF is often called a production possibilities boundary PPBExample MaclandConsider the economy of Macland It produces only 2 goods computers and carsMaclands technology is given it is what it isIts resources are fixedThe following table shows combinations of computers and cars Macland can produce if it uses all its resources given the current technologyCOMPUTERS andCARS A3000 0 B2200600 C2000700 D 0 1000Note that this is only a partial tableLets graph these combinations
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