PPF PowerPoint

Production Possibilities Frontiers Antu Panini Murshid--Principles of Macroeconomics

Today’s Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics Scarcity Efficiency / inefficiency and unemployment Opportunity cost Economic Growth Concave PPF Linear PPF

Production Possibilities Frontier ,[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

Production Possibilities in a Two-Good Economy ,[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

Attainable and Unattainable ,[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 Production Possibilities frontier 0 A C B

Illustrating Concepts Using a Production Possibility Frontier ,[object Object],[object Object],[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

Scarcity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 0 A C B

Efficiency, Inefficiency and Unemployment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 Inside the frontier! A 0

Opportunity Cost ,[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 Not Possible! B 1 1,500 B 2 2,000 800 600 C 0

Economic Growth—Long Run ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 3,000 1,000 1,500 4,000 Quantity of Computers Produced Quantity of Cars Produced 0

Economic Growth–Short Run ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 A Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 B 0

Why Does the PPF Bow Outward? ,[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

Illustrating the Point ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 B 750 D 250 As we move up the PPF its slope decreases 0 A C

Linear PPFs ,[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000  Y  X Slope =  Y/  X Slope at A… equals Slope at B 0 0 B A

Marginal Rate of Transformation ,[object Object],[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

Measuring the Opportunity Cost ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],08/18/09 Quantity of Computers Produced Quantity of Cars Produced 3,000 1,000 Slope =  Y/  X 200 800 2,400 600 0 0  Y  X B A

Summary ,[object Object],[object Object],[object Object],[object Object],08/18/09 Antu Panini Murshid--Principles of Macroeconomics

PPF PowerPoint

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (7)

Similar to PPF PowerPoint

Similar to PPF PowerPoint (20)

More from Corey Topf

More from Corey Topf (20)

Recently uploaded

Recently uploaded (20)

PPF PowerPoint

Editor's Notes