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3. Production possibilities curves and tradeoffs cont.

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PPC fill-in part 2 adapted from https://www.daveforrest.net/Economics/ap-economics-studyguide.pdf

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Shaner Adams
Shaner Adams
Estados Unidos

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3. Production possibilities curves and tradeoffs cont.

PPC fill-in part 2 adapted from https://www.daveforrest.net/Economics/ap-economics-studyguide.pdf

Shaner Adams
1

Smith laissez Opportunity Absolute government lowest Free less interests technology specialized cheaper shift trade labor competition profits resources Comparative Hand faire efficient best

How does the Production possibilities curve ?

There are two key factors :

? 1 . Change in the amount of productive in the economy .
? 2 . Changes in and productivity .

o Adam

Key arguments :
? Division of means that production is more
? People should pursue self - because is good since it means products .
? The should keep its hands off the economy ( - )
? Invisible ? drive the economy with self - interests .
? trade is crucial ? nations benefit by specializing in production of goods and by trading for items that they are efficient in producing .

o Therefore , it would be logical to let countries do what they do for what they need .

o Two types of advantages in free trade :

? : Economists look at the amount of labor hours / costs it will take to produce a product .
? ( Theory of Comparative Advantage ) : even nations with absolute advantages still benefit from . Both nations trading would benefit from trading products if they in items that they have the opportunity cost to produce .

o Calculating Opportunity Costs

? Cost = ? ? ? ? ? ? ? ? ? ? ? ( ? ? ? ? ? ? ? ? ? ? ? ? ) / ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

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