Principle of increasing opportunity costs
Cost beneﬁt principle
Pareto efﬁcient opportunity cost
Not all costs matter equally
Functions/prerequisites for a market
A curve that shows the maximum amount of two outputs that a society could
produce from given resources over a given time period
Its a curve because as production of one good increases,the production of
another decreases at an increasing rate.This is because some resources are
Pareto efﬁciency.Allocating resources so that they are completely efﬁcient.
Moving from Pareto point to pareto point is costly.
Exogenous variables,shifting the PPF
The value of the best alternative that you didn't choose.The value of what you
Everything has a cost,you can't have or do everything.
What is the best other thing you could be doing/could have?
Hamburger vs.hot dog
Opportunity cost of eating the hamburger is not eating the hot dog.Hot dog is
the next best thing you could have. Principle of increasing opportunity cost--use things with least opportunity costs
ﬁrst,then move to the larger ones (robert frank)OR as the production of a
product increases,the cost to produce an additional unit of that product
increases as well.
As opportunity cost becomes higher,the slope of the PPF gr