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Emerson College
Economics (EC)
EC 203

PPF Principle of increasing opportunity costs Budget line Scarcity principle Cost benefit principle Externalities Pareto efficient opportunity cost Marginal analysis Not all costs matter equally Functions/prerequisites for a market PPF 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 more...?? Pareto efficiency.Allocating resources so that they are completely efficient. Moving from Pareto point to pareto point is costly. Exogenous variables,shifting the PPF Opportunity cost The value of the best alternative that you didn't choose.The value of what you gave up. 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
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