ECON 162 Lecture Notes - Lecture 1: Outsourcing, Cultural Imperialism, Type I And Type Ii Errors
19 Oct 2016
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Opportunity cost- the benefit foregone from not choosing the next best alternative. A model that shows the maximum combinations of two goods that can be produced, given a certain quantity of resources and state of technology. Can divide your time between studying(academic life) and partying(social life) beer drinking. You can"t drink and study at the same time. Points a, b, and c are efficient. = opportunity cost of good on horizontal axis. Guns vs butter (military output vs civilian output) beers/se mester. The law of increasing cost: as production of a good increases, the opportunity cost of additional units of that good will also increase. Changes in ppc: change in resources ex. immigration. Butter: change in technology ex. invention of a new milking machine. Smaller amounts of economic growth in the future. Purchases of capital by firms are called investment.
