ECON 2100 Lecture Notes - Productive Efficiency, Opportunity Cost
Document Summary
Productive efficiency is when we"re getting the maximum amount of output from a given amount of resources. Points on the ppf represent the efficient use of resources. If there are no points in the ppf they are not efficient because they are not producing the highest amount as possible. Points on and within the boundary on the ppf are called attainable. The goal of a society is to experience economic growth. Economic growth happens when we are able to produce greater amounts of goods and. When the economy grows, some previously unattainable combinations of good become attainable. This is represented by a outward curve of ppf. Examples: population increase (more ppl can work), discovery of natural resources (iron, gas) Is the idea that opportunity cost is constant along the ppf. Remember that opportunity cost is constant example : by giving up a little bit of wheat, we are getting a lot of weapons.
