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LO4
6543210
02468
1012
DVDs$20
Books$10
$120 Budget 12
10
8
6
4
2
0 2 4 6 8 10 12 14Quantity of Paperback Books
Qua
ntit
y of
DVD
s
Income = $120Pdvd = $20
= 6
Income = $120Pb = $10
= 12
Attainable
Unattainable
1-1©2013 McGraw-Hill Ryerson Ltd. 1 Chapter 1, LO6
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Illustrates production choicesAssumptions:
Full employment Fixed resources Fixed technology Two goods
©2013 McGraw-Hill Ryerson Ltd. Chapter 1, LO6 2
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LO5
Type of Product
Pizzas (in hundred thousands)
Industrial Robots (in thousands)
Production AlternativesA B C D E
10 9 7 4 0
0 1 2 3 4
Plot the Points to Create the Graph…
1-3©2013 McGraw-Hill Ryerson Ltd. 3 Chapter 1, LO6
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LO5
The law of increasing opportunity costs makes the PPC concave.
1-4
Pizzas
Indu
stria
l Rob
ots
Attainable
0 1 2 3 4 5 6 7 8 9
1413121110 9 8 7 6 5 4 3 2 1
Unattainable
A
B
C
D
E
U
©2013 McGraw-Hill Ryerson Ltd. 4Chapter 1, LO6
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LO5
a
b
c
d
e
MB = MC
MC
MB
15
10
5
0
1 2 3Quantity of Pizza
Mar
gina
l Ben
efit
& M
argi
nal
Cost
1-5©2013 McGraw-Hill Ryerson Ltd. 5 Chapter 1, LO6
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Type of Product
Pizzas (in hundred thousands)
Industrial Robots (in thousands)
Production AlternativesA' B' C' D' E'
14 12 9 5 0
0 2 4 6 8
LO6 1-6©2013 McGraw-Hill Ryerson Ltd. 6Chapter 1, LO7
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LO6
Pizzas
Indu
stri
al R
obot
s
Attainable
0 1 2 3 4 5 6 7 8
1413121110 9 8 7 6 5 4 3 2 1
Unattainable
AB
C
D
E
EconomicGrowth
Now Attainable
A’
B’
C’
D’
E’
1-7©2013 McGraw-Hill Ryerson Ltd. 7 Chapter 1, LO7
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LO6
Goods for the Present
Good
s for
the
Futu
re
Good
s for
the
Futu
reGoods for the Present
P
F
CurrentCurve
CurrentCurve
FutureCurve
FutureCurve
Presentville
Futureville
1-8©2013 McGraw-Hill Ryerson Ltd. 8 Chapter 1, LO7