ECON 2030 Chapter : Notes Chapter 2 1
Document Summary
Practice problems (chapter 2): 1, 2, 4-8, 10. The introduction of markets that facilitate trade and the spread of democracy have resulted in the growth of the world economy. Markets allow specialization and encourage trade: specialization and trade create gains that make all better off, trade lets countries consume beyond their ppc. It"s not productivity that matters cost is the major factor. The limitation of this tool: economic growth producing more at a point in time than in previous times, macroeconomic concept. B: at point a our finite ability to produce food, at point b our finite ability to produce clothing, all points in between (on line ab), possibilities to produce both. If we are producing inefficiently, the opportunity cost of producing more is zero. As we move along points on the line, the opportunity cost is the change. The problem with this curve - - we cannot determine an optimal point.
