100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Economics: Scarcity & Productive Efficiency $7.49   Add to cart

Class notes

Economics: Scarcity & Productive Efficiency

 3 views  0 purchase
  • Course
  • Institution
  • Book

Full lesson including notes, simple definitions, examples, and graphs. Ch 2: • Economic Good • Opportunity Cost • Marginal-Benefit, -Cost, -Revenue • Supply Curve/Marginal Cost Curve • Demand Curve/Marginal Benefit Curve • Production Possibilities Frontier Curve (PPF/PPC) • ...

[Show more]

Preview 2 out of 5  pages

  • June 13, 2021
  • 5
  • 2020/2021
  • Class notes
  • Mr. g
  • All classes
avatar-seller
Economics 2: Scarcity & Productive Efficiency
Economics: “The study of how individuals and economies deal with scarcity”
Opportunity cost: The cost of not selecting the next best alternative  Only 1 opportunity cost


Marginal –benefit, -cost, -revenue
Marginal benefit: “Additional benefit associated with a 1-unit increase in activity level”
Marginal cost: “Additional cost associated with a 1-unit increase in activity level”
Example: Kelsee makes 20 johnny cakes; Economist want to know how much profit she
will make from 1 additional (The 21st) johnny cake.


Activity rises = Marginal benefit > Marginal cost
Net benefit rises as activity decreased = Marginal cost > Marginal benefit


Supply curve = Marginal Cost Curve
Individual marginal cost curve: Shows the extra cost
a seller incurs to produce 1 more unit of goods
Market marginal cost curve: Combine individual
marginal cost curves
Example: To supply more rice, more land
Demand curve =
Marginal benefit curve
Individual marginal benefit curve: Shows the extra benefit a
buyer enjoys by consuming 1 more unit of goods
Example: Buyer eats more rice, satisfaction decreases

, Drill for more oil until marginal cost = $100 oil
price
If Marginal cost > $100 = Profit




Production Possibilities Frontier Curve (PPF/PPC)
PPF: show all possible combinations of output that can be produced given
 Illustrates tradeoffs of scarcity
PPF assume:

 Fixed quantity and quality or available resources
 Fixed technology
 Efficient production: “No unemployed/underemployed resources”
3 parts to PFF:

 Under the curve: Underutilizing factors of production/resources (Inefficient)
 On the curve: Maximizing use of factors of production/resources (Efficient)
 Over the curve: Based on current resources, we can’t produce outside the curve
(Unattainable with current resources)
PPF Shifters:

 Change in quantity/quality of resources
 Change in technology
 (Trade)
Example: In 1920 corn & cars, now we can make more because better and more resources and
better technology
Trade can also shift PPF curve:
“Allows countries to consume beyond their production possibilities”
Can get more through trade, can’t produce more


Consumer goods: “Created for direct consumption”  Pizza

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller BizNotesSupplies2021. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75323 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$7.49
  • (0)
  Add to cart