GEOG 216 Lecture Notes - Lecture 3: Opportunity Cost, Planned Economy, Mixed Economy
15 May 2016
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Document Summary
Economy is a system, which enables people to meet their needs. The economy addressed basic questions; an economy is a system that links people together. Definition of economy is not contingent on a geographic scale. Choice is inevitable when resources are scarce, trading off reflects valuation. You valued something by choosing a over b. Peoples choices b/w a and b reflects their preferences this is central to economic problem. At point x we are producing less than could be produced, the convex curve is the envelope. Everything within that envelope or the frontier are all possible combinations of producing goods. To produce more we can have more resources in the economy or increase technological change. The notion of opportunity cost is very straightforward the oc of one hour of studying is a lost hour of partying. Economic growth is the movement of the ppf outward.
