Econ Macro Ch02

ECON Designed by Amy McGuire, B-books, Ltd. McEachern 2008-2009 2 CHAPTER Economic Tools and Economic Systems Macro

Choice and Opportunity Cost LO 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

LO 1 Case Study The Opportunity Cost of College ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Opportunity Cost LO 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sunk Cost and Choice LO 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Law of Comparative Advantage LO 2 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Specialization and Exchange LO 2 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Division of Labor LO 2 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Efficiency and the PPF LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Efficiency and the PPF LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

LO 3 Exhibit 1 PPF (AF): Economy uses all resources and technology efficiently PPF: bowed out; law of increasing opportunity cost Inefficient: inside PPF Unattainable: outside PPF The Economy’s Production Possibilities Frontier 10 20 30 34 43 48 50 Consumer goods (millions of units per year) 10 0 50 40 30 20 Capital goods (millions of units per year) A C D E F B U Unattainable I Inefficient

The Shape of the PPF LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What Can Shift the PPF? LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What Can Shift the PPF? LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Exhibit 2(a), (b) LO 3 (a) Increase in available resources (b) Decrease in available resources ,[object Object],[object Object],(b) Inward shift of PPF – decrease in available resources - decreased production of both capital and consumer goods Shifts of the Economy’s Production Possibilities Frontier A A’ Consumer goods F’ F Capital goods A A’ Consumer goods F’ F Capital goods

Exhibit 2(c), (d) LO 3 Shifts of the Economy’s Production Possibilities Frontier (d) Increase in resources or technological advance that benefits capital goods (c) Increase in resources or technological advance that benefits consumer goods A A’ F Capital goods A Consumer goods F’ F Capital goods Consumer goods

What We Learn from the PPF? LO 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Economic Systems LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Economic Systems LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pure Capitalism LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pure Capitalism: Flaws LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object]

Pure Command System LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Pure Command System: Flaws LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Mixed and Transitional Economies LO 4 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

LO 3 Case Study ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Rules of the Game and Economic Development

Exhibit 3 LO 3 Best 10 and Worst 10 Among 175 Countries Based on Ease of Doing Business, According to the World Bank Best 10 Worst 10 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],166. Burundi 167. Central African Republic 168. Sierra Leone 169. São Tomé and Principe 170. Eritrea 171. Republic of Congo 172. Chad 173. Guinea-Bissau 174. East Timor 175. Democratic Republic of Congo

LO 3 Case Study Rules of the Game and Economic Development ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

LO 3 Case Study ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Rules of the Game and Economic Development

LO 3 Case Study ,[object Object],[object Object],[object Object],[object Object],[object Object],Rules of the Game and Economic Development

Econ Macro Ch02

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