ECON 1020 Lecture Notes - Lecture 3: Neoclassical Economics, Allocative Efficiency, Opportunity Cost
13 Nov 2016
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Document Summary
The method of economics: criteria for judging outcomes according to neoclassical economists. An efficient econ is one that produces what people want at the least possible cost. Growth: an increase in the total output of an economy. Stability: a condition in which national output is growing steadily, with low inflation and full employment of resources. Parts of our econ might work together with effeciency. Firm might decide best way to make profit is make a short-lasting product, but maybe we shouldn"t waste resources. The production possibility frontier (ppf): a graph that shows all the combinations of goods and services that can be produced if all of society"s resources are used efficiently. All points below represent combinations of capital and consumer goods that are possible for the society given the resources available and existing technology. Capital goods: things that would help to make more (school supplies, white boards) Any point on the curve implies we are using resources efficiently.
