Micro Chap. 2

• boundary b/w combos of goods that can be produced and those that can't 
• can't produce #'s outside boundary

produce goods at lowest possible cost, any POINT on graph

• highest valued alternative forgone
• what do I give up over what do I gain
• ration 
• decrease of good a / increase of good b
• higher opp cost = higher opp cost of production

achieved when goods are provided at lowest costs and in quantities that provide the greatest possible benefit

• opp cost of producing one more unit of it
• calculated from slope of ppf. Points pass through middle

Likes and dislikes and intensity of those feelings

• shows relationship b/w marginal benefit from good and quantity consumed of good
• the more we have of a good, smaller the marginal benefit b/c we won't pay as much for it eg. more pizza.
• UNRELATED to ppf

• expansion of production possibilities
• increase standard of living 
• face a tradeoff, more production, more opp cost, reduce consumption

• 2 factors
• Technological change - development of new goods and better ways of producing goods
• Capital Accumulation - growth of capital resources (human capital, buildings etc) 
• This won't eliminate scarcity 
• goal is produce less consumption goods

produce limited types of goods

• somebody produces at lower opp cost than anyone else
• compare opp costs

compares production values, someone who is better at almost everything

• 1. Firm
• 2. Markets
• 3. Property 
• 4. Money
• need these to work

hires factors of production, organize factors to produce or sell goods

• Trade b/w firms
• arrangement that enables buyers and sellers to exchange info and do business
• sometimes not a physical place

• ownership, use, disposal of anythingn people value
• real property - land, buildings, durable goods
• financial property - stocks, bonds, money in bank
• intellectual property - intangible product of creative effort. Books, music

• commodity or token that is generally acceptable form of payment
• makes trading more efficient