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Production Possibilities Curve (PPC) What is it? Why use it?

Production Possibilities Curve (PPC) What is it? Why use it?. PPC curve. PPC can shift. Specialization – can affect shape of curve! Shape of curve shows effects of shifting resources Marginal Opportunity Cost -. Why Specialize???. Coach/ Manager of a restaurant

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Production Possibilities Curve (PPC) What is it? Why use it?

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  1. Production Possibilities Curve (PPC)What is it?Why use it?

  2. PPC curve

  3. PPC can shift

  4. Specialization – can affect shape of curve! • Shape of curve shows effects of shifting resources • Marginal Opportunity Cost -

  5. Why Specialize??? • Coach/ Manager of a restaurant • Why do countries specialize? • Trade with specialization leads to points outside the PPC

  6. Choice of what to specialize in based on opp. cost. • Comparative Advantage – ability of person or nation to create good w/ lower opp. cost than another. • *** Relative amount given up, not actual amt = comp. adv.

  7. Comparative Advantage

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