Production Possibilities Curve simplifying assumption
To show opportunity cost Allocative efficiencies vs. Productive efficiencies
Cost of the First 20 Bread
Cost of the Second bread = 20 steel
Cost of the Third Bread = 50 Steel
All Allocative in the PPC represents productive Maximum possible output efficiencies
Which combination is produced if combination is produced if combination is what society wants then there is Allocative efficiencies.
No cost attached to giving up outputs. Investment-Purchase of Capital
If investment increasing later there is more capital in future in future more resources.
Circular Flow (Cont.) Flow of good v. Flow of money
Chapter 5 pg. 70-78 + 82-87
Functional v Personal income Distribution
Total income= Y= C+S+T
Poverty Rate in the United States is 12.7