Society's menu of choices

Assumptions

Fixed Fixed Full 2 good world

LessonsE13Ch2aPPF

Limits - points inside, yes; outside, no. Costs Trade-offs Cost and slope - slope. Why is slope equal to cost? Efficiency Increasing cost - resources not homogeneous Economic Growth - generally and as a result of an increase in T or R that affects the output of one good only

Doing something with fewer resources or to produce more with given inputs.

Production cost is not necessarily opportunity cost.

Example

Benefits from trade. Now the CPF>PPF!!!!!

Doing something at lower opportunity cost

Example

Gains from trade

Graphs?

The gains from trade can be fleeting -

Oil in the Us Steel Accounting done in Ireland Internet stuff?

Comparative advantage assumes fixed resources and technology

What happens when oil is depleted or when the technology changes? Might the comparative advantage change also? The book example of the copper pots in Nepal.

There are redistributive effects from trade. Duh. Incomes are altered among a country's residents when there are changes in the composition of international trade.