EC120 Lecture Notes - Lecture 2: Opportunity Cost, Perfect Competition
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EC120 Full Course Notes
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Document Summary
In 2012 9. 7% of families have an income below the low-income cut-off. A positive question is one that potentially has a fundamental definite answer, a normative question is one that could not have a definite right answer. Countries are better at assessing rich or middle class because the government receives much more money from those economic classes. Study module for supply and demand due monday. Models are simplifications and usually focus on core elements. Ppf economy simplified to 2 goods. Highlights two main concepts: trade-offs, opportunity cost, efficiency. Can be used to think about economic growth. Feasible anything on the ppf line or in between the border. Efficient anything on the frontier line itself. Moving along a ppf shows us the opportunity cost. A ppf may be linear, bow-shaped, or bend inward or go towards the origin. The greater the slope of the ppf the greater the opportunity cost is.
