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5 Cards in this Set
- Front
- Back
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Economic Models
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Diagrams and Equations
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Roles of Assumptions
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Assumtions can simplify the complex world and make it easier to understand.
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The Production Possibilities Frontier (PPF)
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A graph that shows combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
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Productive Efficiency
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if the economy is getting all it can from the scarce resources it has available.
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The Law of Increasing Opportunity Cost
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that the cost of producing additional product A by giving up some of product B is increasing. As in diagram PPF
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