Christiana's AP Macroeconomics Blog

                     Production Possibilities Graphs (PPG, PPC, or PPF)   A.K.A Production Possibilities Curve or Frontier     - Each point shows trade-off -Shows alternative ways to use resources - Shows most that society can produce if it uses every available resources to best of ability Point A (Inside the curve) - Attainable, inefficient, underutilization Unemployment, Underemployment, war, famine, natural disasters Recession/Depression Point B [ Curve of the Frontier] (on the curve) attainable & efficient **Utilization of resources efficiently** Point C- (Unattainable -Outside the curve) *Technology *Economic Growth Key Assumptions Full employment (not possible w/ laziness, disabled + retired )             *80-90% factor capacity ...

Basic Economic Concepts Economics - the study of how choices are made given the fundamental condition of scarcity Scarcity - limited resources are met with unlimited wants and needs [Permanent] Ex: Oil   ( fundamental economic prob. all societies face ) 1st Pillar of Economic Wisdom - "nothing in our material can come from nowhere or go nowhere, not can it be free. Everything in economic lives has a source, destination and cost must be paid" 5 Key Economic Assumptions                       A.     Society’s wants are unlimited, but all resources are limited ( Scarcity ) B.      Due to scarcity, choices must be made. Every choice has a cost ( Trade-off ). C.      Everyone’s goal is to make choices that maximize their satisfaction. Everyone acts in their own " self-interest ." D.   ...