10/21

• Trade
• creates wealth although nothing new is created
• non-technical form of production
• enables people to know what they value
• Efficiency
• utilization of your stock of resources to get more done faster
• Production Possibilities Frontier
• all possible combinations of goods that can be produced given the following: level of education, amount of resources, and access to technology
• Properties
• All points on/in the curve is achievable
• Absolute advantage: more efficient(larger number) on x-axis ,or y-axis, or both
• All points to the NE are NOT achievable
• Points on the PPF are "productively efficient"
• economically efficient is not just producing at lowest cost but also producing what the people want
• Slope
• captures trade-offs between amount of the good on x-axis and amount of the good on y-axis
• Change in Slope
• "Law of Diminishing Returns"(law of increasing opportunity costs)
• next produced good is more costly than the previous one
• ex: teachers taken from education field into medical field results in worse quality of doctors and each teacher that the education field loses was better than the last
• Economic Growth
• 3 factors
• Resources 
• Technology
• Trade
• Comparative Advantage
• ex: two groups that only make the same two products
• Rochester: 10 bottles wine/yr 5 cameras/yr
• Cornell: 5 bottles wine/yr 4 cameras/yr