ECON 1000 Lecture Notes - Opportunity Cost

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Kieran Furlong

Document Summary

Production possibility curve = max. output combinations producible from a give set of resource inputs and a given set of technology: production possibility curve demonstrates scarcity, choice and opportunity cost. Look at the canada divided into 7 regions example in ln: max output when you can only shift one (wheat or apples), then bc is max bc most is gained and least is lost. Minimize opportunity cost (lose out the least thing you can) Opportunity cost is the slope of the curve (rise run) ( qwheat qapples) Constant slope = resources are identical; you"re not losing anything from doing anything else or changing anything. When you already have something (production possibility curve implies you already have something going for you), you have to start giving it up to gain something else elsewhere. To produce an outlier (outside the curve), increase in resources/capital or technological advancement; (inside the curve), inefficient use of resources and not enough technological advancement to maximize inputs.