ECON 202 Lecture Notes - Lecture 2: Lincoln Near-Earth Asteroid Research, Opportunity Cost

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Econ 202: principles of microeconomics - lecture 2: trade-offs, comparative. Scarcity: a situation in which unlimited wants exceed the limited resources available to satisfy those needs. I. e. a company may want an endless supply of a certain type of metal but in reality, this resource is limited only so much of it exists and is available to the company. Economics teaches us good tools to help make trade- offs. I. e. perhaps that company must sacrifice some of the metal that it desired to use for its production (make a trade-off) and use a different material, or acquire metal from another company. A production possibilities frontier (ppf) is a curve that shows the maximum combination of two products that may be purchased with available resources and current technology. You are on an island for 8 hours, and your only sources of food are fish (f) and coconuts (c) In one hour, you can catch 3 fish.

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