E Q : H O W D O N AT I O N S I N C R E A S E T H E I R W E A LT H ?
THE PP CURVE
You must make yourselfworse off in the short runto make yourself betteroff in the long run.
Study
Leisure
Peanuts
Oranges
CapitalGoods
ConsumptionGoods
http://www.bradyworld.com/cover/minnow.jpg
The ship set ground on the shore of this uncharted desert isle
http://images.google.com/imgres?imgurl=www.timvp.com/gillign2.jpg&imgrefurl=http://www.timvp.com/gilligan.html&h=270&w=295&prev=/images%3Fq%3Dgilligan%2527s%2Bisland%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8
http://www.tasaday.com/images/_sl-003.jpg
http://www.coracle-fishing.net/corac-pix2/net-11x.jpg
http://www.surfingforlife.com/g/cult_b10.jpg
http://www.zeroimpactproductions.com/seine-over-freezer.jpg
http://www.riveroflifefarm.com/images/lodging/th/th2/tree-house-summer.jpg
CapitalGoods
ConsumptionGoods
By producing more capital goodsrelative to consumption goods,the economy’s Production-possibilites curve to shifts OUTWARD and shifts outward FASTER.
Capital
Consumption
If the PP shifts outward
This is GOOD!
Capital
Consumption
If the PP shifts inward
This is BAD!!
CapitalGoods
ConsumptionGoodsThere are five variables that
shift the PP outward--
Five Variables that Shift the PP Outward:
1. Increase the productive labor force (productivity).2. Increase the quantity and quality of natural resources.3. Increase the quantity and quality of capital.4. Increase health and education.5. Increase technology.
Capital
Consumption
Japan 1941
What capital goods did Japanproducein 1940?
What consumptiongoods did it produce?
rice
What did Japan do on December 7, 1941 ?
Capital
Consumption
Japan 1945
rice
What did the U.S. do toJapan for this dirty deed?
http://www.nhc.rtp.nc.us:8080/tserve/nattrans/ntimages/hiroshima.jpg
http://www.archives.gov/digital_classroom/history_day/bright_ideas/images/nagasaki.gif
Hiroshima
Nagasaki
morning of August 6, 1945
11:02 am, August 9, 1945
Capital
Consumption
Japan 1945
rice
What do you think happenedto Japan’s productive labor force?
Capital
Consumption
Japan 1945
rice
What do you think happenedto the quantity and quality of its natural resources?
Capital
Consumption
Japan 1945
rice
What do you think happened tothe quantity and quality of its capital stock?
Capital
Consumption
Japan 1945
rice
What do you think happened toits health and education?
http://hiroshima.tomato.nu/image/park_ma/e11-10.jpg
Capital
Consumption
Japan 1945
rice
What do you think happened toits technology?
Capital
Consumption
Japan 1945
rice
What happened to Japan’sPP?
CapitalGoods
ConsumptionGoods
http://www.ellsworthamerican.com/archive/news2000/08-24-00/news3_08-24-00b.gif
CapitalGoods
ConsumptionGoods
CapitalGoods
ConsumptionGoods
Guns
Butter
Military
Consumption goods
WHAT ARE SOME EXAMPLES OF CAPITAL GOODS?
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