Laws of Increasing Opportunity Cost
When switching production from one item to another as you increase, a higher rate of cost will be necessary to continue increasing.
When switching production from one item to another as you increase, a higher rate of cost will be necessary to continue increasing.
- In point C, production is attainable but inefficient. This may be due to war, famine, or unemployment.
- In point A, B, D and F, production is attainable and efficient.
- Point E is just plain unattainable, which could be because of technology or economic growth.
Here's a six-minute video delving more into how to read Production Possibilities Graphs (PPC):
Interesting video choice, it really helped me understand better what was quite confusing for me in class. The guy points out what I really couldn't see before hand, and I really have to commend you on this video choice- it helped me out more than I would have expected. This really helped me understand this in a way I wouldn't have been able to on my own (unless, of course, I found this video on my own), and that's really valuable, so thank you for that.
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