ECON 105 Lecture Notes - Lecture 3: Opportunity Cost, European Cooperation In Science And Technology

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ECON 105 Full Course Notes
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ECON 105 Full Course Notes
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Moving along the ppf involves shifting resources (eg. labour) from the production of one good to another good. Society faces a trade off: getting more of one good requires sacri cing some of the other. The slope of the ppf is the opportunity cost. With additional resources or a technological advance, the economy can produces more, the ppt graph shifts outwards: economic growth - shifts ppf curve outward. The shape of the pfp: could be a straight line or concave. Why might the ppf be bow-shaped: workers have different skill, different opportunity cost in terms of one good, when some resources are better suited to some uses than others. !1: different types of land are suited for different uses, and therefore have opportunity costs of producing one good in terms of the other. Shows all combinations of two goods that an economy can possibly produce given the available factors of production and the available technology.

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