Factors of Production
Land
- Natural Resources
Labor
- Work Exerted
Capital
- Human Capital: When people acquire skills and knowledge through experience and education
- Physical Capital: Money, Tools, Buildings, Equipment, and Machinery
Entrepreneurship
- Risk Taker
- Innovative
Vocabulary
- Trade-Offs: An alternative that we sacrifice when we make a decision.
- Scarcity leads to trade-offs
- *Ex: A farmer who plants tomatoes in one spot cannot plan corn in the same spot at the same time, he can only have one or the other.
- Opportunity Cost: Most desirable alternative given up as a result of a decision.
- “Guns or Butter”: Trade-offs that the government makes when choosing whether to produce more or less military or consumer goods.
- Thinking at the Margins: Deciding whether to add or subtract one additional unit at some resource
Production Possibilites Graph/Curve/FrontierPPG/PPC/PPF - Production Possibilities Graph/Curve/Frontier: A graph that shows alternative ways to use economic resources.
- Efficiency: Using resources in such a way to maximize the production of goods and services
- Increases Profit
- Under Utilization: Opposite of Efficiency; Using fewer resources that an economy is capable of using
- Decrease in Profit
A= Attainable and Efficient
C=Attainable, Inefficient, Underutilization
B=Unattainable (Outside PPC)
4 Key Assumptions
- Only 2 goods can be produced
- Full employment of resources
- Fixed Resources (Factors of Production)
- Fixed Technology
Your blog is organized, in depth and presentable. One thing I believe you could add in order to enhance your readers understanding of the concept is real life scenarios that would depict efficiency or underutilization in your ppg. For example widespread lay-offs or advancement in manufacturing technology
ReplyDeleteYour blog is well put together and your note-taking skills are excellent! However, I wouldn't hesitate to add the four key assumptions about the PPG. For example:
ReplyDelete1. Only two goods can be produced
2. Full employment of resources (Using all that they have)
3. Fixed Resources (Factors of Production)
4. Fixed Technology
Expanding upon the circumstances off attainable and unattainable. Attainable and inefficient can occur because of unemployment or underutilized of resources. Attainable and efficient means that all resources and workforce is being deployed in full. Unattainable is when technological advancement or events similar in nature occur.
ReplyDelete