1.3. Because resources are scarce, businesses and consumers need to make wise choices. Trade-offs are the alternative choices people face in making an.

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    03-Jan-2016

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<p>Economic Choices and Decision Making</p> <p>Economic Choices and Decision Making1.3Introduction</p> <p>Would you see the movie three times?Notice that the total benefit is more than the total cost but you would NOT watch the movie the 3rd time. Thinking at the Margin# Times Watching MovieBenefitCost1st$30$102nd$15$103rd$5$10Total$50$30Trade-Offs and Opportunity Cost</p> <p>Trade-Offs and Opportunity Cost</p> <p>Production Possibilities</p> <p>Production Possibilities</p> <p>Production Possibilities Frontier</p> <p>?Production Possibilities Frontier</p> <p>Production Possibilities Frontier</p> <p>Production Possibilities FrontierThe line on the graph represents the full potential (the frontier) - when the economy employs all of their productive resources. </p> <p>Production Possibilities FrontierEconomic growth is needed for Cmore resourcesa larger labor forceincreased productivity </p> <p>Production Possibilities FrontierAn economy pays a high cost if any of its resources are idle:It cannot produce on its frontier and it will fail to reach its full production potential. </p> <p>Thinking Like an Economist</p> <p>The Road Ahead</p> <p>The Road Ahead</p>

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