Unit 1

January 5

• Thinking at the margins- Deciding whether to add or subtract one additional unit of some resource.
• Productive possibility graph- It shows alternative ways to use an economics resource
• the line on the PPG is known as the frontier or curve.
• when producing at the frontier efficiency occurs 
• when producing benet the frontier under utilization occurs.
• Efficiency- Using all resources in such a way to maximize the production of goods and services
• Efficiency increases profits
• Utilization- Opposite of efficiency 
• using fewer resources that an economy is capable of using
• leds to a decrease in profits
• Point A- Attainable and Efficient ( On the curve)
• Point B- Attainable and Inefficient/Underutilization Unemployment or Underemployment (Inside the Curve)
• Point C- (Outside the curve)

4 Key assumption

1. Only 2 goods can be produced
2. Full employment of resources
3. Fixed resources (Factors of Production)
4. Fixed technology

Three Types of Movement that Occur Within The PPC

1. Inside the PPC
2. Along the PPC
3. Shift of the PPC