Unattainable: [e.g., given our scarce resources, there D is no way that we could produce 85,000 Bananas and 12,000 Apples] Attainable and Efficient: and [e.g., starting at A, B, C we could produce 20,000 more B, Bananas, but we’d have to be willing to give up 3,250 Apples => we move from to B C”] “tradeoff as Attainable but Inefficient: [e.g., starting at we E E, could increase production of either good (or both) without decreasing production of any other good] In general… of “Downward sloping nature curve” reflects “tradeoff in production that results from scarcity of resources” as we move down the “Curve becomes steeper curve” results from resources in the most efficient “allocating manner”
Unattainable: D [e.g., given our scarce resources, there is no way that we could produce 85,000 Bananas and 12,000 Apples] Attainable and Efficient: A, B, and C [e.g., starting at B, we could produce 20,000 more Bananas, but we’d have to be willing to give up 3,250 Apples => “tradeoff as we move from B to C”] Attainable but Inefficient: E [e.g., starting at E, we could increase production of either good (or both) without decreasing production of any other good] In general… “Downward sloping nature of curve” reflects “tradeoff in production that results from scarcity of resources” “Curve becomes steeper as we move down the curve” results from “allocating resources in the most efficient manner”
02_Fundamental%20Questions%20and%20Gains%20from%20Specialization_Overhead%20Slides.docx