MGT 3320 Chapter : Chapter 1 PowerPoint
Document Summary
Law of increasing opportunity costs: as more of a good is produced, the opportunity costs of producing that good. Production possibility curve for a society: the production possibility curve (ppc) is bowed outward showing that opportunity costs increased. Productive efficiency and inefficiency: productive efficiency- the condition where the maximum output is produced with given resources and technology, productive inefficiency- the condition where less than the maximum output is produced with given resources and technology. Shifts in the pcc: society can produce more output if, technology is improved, more resources are discovered, economic institutions . Distribution and production efficiency: the ppc focuses on productive efficiency and ignores distribution. In our society, more is generally preferred to less and many policies have relatively small distributional effects. Markets are usually a good way to organize economic activity.
