ECO 105 Lecture Notes - Marginal Utility, Marginal Cost, Mpra Language
Document Summary
Chapter 2 the key principles of economics. Mainly based on adam smith"s idea of classical economics. Opportunity cost what you sacrifice to get something (time, money, labor, etc. ) I sacrifice sleep so i can go to class . The war in iraq will cost trillion dollars, and that money could immunize children in all under developed countries for 33 years. Production possibility curve a curve that shoes the possible combinations of products that an economy can produce, given that its productive resources are fully employed and efficiently used. The more steel you produce, the less wheat you can produce. The more wheat you produce, the less steel you can produce. New resources introduced into the economy cause the curve to shift out. Removing resources from the economy with cause the curve to shift in. The opportunity cost of creating 10 more tons of wheat per year is 50 tons of steel.