BYJONATHAN DUNLOP

ASHAR SHAIKJOYCE LIN

Reading Graphs

Terms to know

PPF- (Production Possibilities Frontier) A graph used to calculate tradeoff and opportunity costs

assuming that you have maximum efficiency. Supply and Demand shifts

Shift- where the curve itself shifts right or left along the X-Axis.

Supply and Demand movements Movement- change along the curve.

Elasticityo The degree to which a demand or supply curve reacts to a

change in price is the curve's elasticity.

Shortages and Surpluses Shortage is a lack of something desired. Surplus is an excess of something desired.

PPF graph

The frontier is the most of what you can produce of things.

A graph used to calculate tradeoff and opportunity costs assuming that you have maximum efficiency.

If you produce more refrigerators, you can’t produce as many cars- thus, the shape of the curve indicates that the opportunity cost of producing more of one product is greater at some points along the curve than at others.

X- attainable but inefficientY- unattainable

Supply and demand shifts

A shift is where the curve itself shifts right or left along the X-Axis.

Supply and Demand movements

A Movement is a change along the supply or demand curve.

Elasticity

The degree to which a demand or supply curve reacts to a change in price is the curve's elasticity.

Shortages and Surpluses

Surplus is when the quantity supplied exceeds the quantity demanded.

Shortage is when the quantity demanded exceeds the quantity supplied.

Review Game

If consumer income increases, what would happen to the demand curve?

Quantity

Pri

ce

D

The demand curve would shift to the right

Review Game

What can move the PPF forward? More resources and more technology