ECONS 101 – 1st Edition Lecture 2 Outline of Last Lecture I. Intro to EconomicsII. Normative/Positive AnalysisIII. Principles of ChoiceOutline of Current Lecture I. Production Possibilities Frontier (PPF)Current LectureProduction Possibilities Frontier (PPF)- A PPF is a curve showing the maximum attainable combination of two products that maybe produce with available resources and current technology.- The point of a graph is to help us visualize:o Scarcityo Choiceo Efficiency – no missed opportunitieso Opportunity Cost – what must be given up in order to get a goodo Economic Growth – the ability to increase the production of goods and servicesScenario:- Consider a tract of land that provides two important services:o Tons of CO2 abatemento Bushels of Corn- Here, the trade-off would be with respect to land use.- Knowing what we know, what combination of corn and CO2 should we pick to get the most out of the tract of land?These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Each scenario is a point on the PPF.- When we move from scenario to scenario, we assume Ceteris Paribus: all else being heldequal.- If we were to graph the various choices, our graph would look like
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