ECO100Y5 Exam Solutions Fall 2018: Fisher Equation, Substitute Good, Price Ceiling
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ECO100Y5 Full Course Notes
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Possibilities boundary (ppb) represents the various combinations of two goods that can be produced with the given resources and technology within an economy. The production possibilities boundary (ppb) represents the various combinations of two goods that can be produced with the given scarce resources and technology within an economy. Points along the ppb represents the maximum amount of each combination of goods that can be produced. Economic growth occurs when there is an increase in the amount of goods that can be produced using the same amount of scarce resources. The effect on the ppb is that there will be an outward shift of the ppb as the maximum amount of each combination of goods that can be produced increases. The relative price of x (in terms of y) before the price changes is: The relative price of x (in terms of y) after the price changes is: