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Krugman AP Macro Economics Chapter 3

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Economics [1]
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economics [2]
Microeconomics [3]
Costs [4]
Production–possibility frontier [5]
Economic efficiency [6]
Inefficiency [7]
Opportunity cost [8]
Productive efficiency [9]
Production theory [10]
behavior [11]
Human development [12]
Computing [13]
Computer file formats [14]
Electronic documents [15]
Interpersonal relationships [16]
Psychoanalysis [17]
Human behavior [18]
Portable Document Format [19]
Attachment theory [20]
Technology [21]
Business [22]

? Chapter 3: The Production Possibilities Curve Model ? Trade-Off: when you give something up in order to have something else Production Possibilities Curve Model: simplified economy that only produces two goods, able to show trade-off?s more clearly, simplifies the complexities of reality inside/on the curve (shaded area): feasible outside the curve (shaded area): not feasible PPC= production possibilities curve Slope of a straight line production possibilities curve equal to the opportunity cost Outward shift: increase in resources of progress in technology Efficient: no missed opportunities, no way to make some people better off without making other people worse off

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