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HOW CAN OUR FRIEND BILLY BECOME AN EFFICIENT INDIVIDUAL?

Date : February 7, 2013 Topic : Production Possibilities Curves Aim : How does a production possibilities curve reflect an economy? Do Now : Handout.

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HOW CAN OUR FRIEND BILLY BECOME AN EFFICIENT INDIVIDUAL?

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  1. Date: February 7, 2013Topic: Production Possibilities CurvesAim: How does a production possibilities curve reflect an economy?Do Now: Handout.

  2. HI, IM BILLY. IM LAZY. I WAS BORN WITH MANY TALENTS. I CAN SEW, SING, DANCE, CATCH A FRISBEE WITH MY TEETH BUT I DON’T PURSUE THESE TALENTS BECAUSE OF MY LAZINESS. IM AN INEFFICIENT PERSON… HOW CAN OUR FRIEND BILLY BECOME AN EFFICIENT INDIVIDUAL?

  3. Efficiency • Efficiency using resources to maximize the production or output of goods and services. • What would happen if suddenly an economy was not efficient? Can you give an example? • Underutilization  using fewer resources than an economy is capable of using.

  4. AN OLD OIL BURNER IS GOING TO USE MORE OIL TO HEAT YOUR HOME COSTING YOU MORE MONEY!  INEFFICIENT!

  5. Production Possibilities Curves, Frontiers, and Graphs • Production Possibilities Curve (or frontier)An economist decides which goods or services to examine– two (2). • Alternative ways to use a economy’s resources. • Trade-offs between any two items produced.

  6. LET’S DO ONE OF THESE ON OUR OWN

  7. Law of Increasing Costs • As production switches from one item to another more and more resources are necessary to increase production of the second item….

  8. HOMEWORK

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