1. ECON Designed by Amy McGuire, B-books, Ltd. McEachern 2008-2009 2 CHAPTER Economic Tools and Economic Systems Macro
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11. 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
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16. 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
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