1
Q
How to determine if resources are allocated in the best possible way?
A
- Production is efficient from a technical point of view. Can I produce it cheaper or not?
- Producing the goods that society desires the more to maximize collective welfare
- Exchanges must be efficient. How to distribute the production? Price mechanism/government intervention
2
Q
PPF:
A
Identifies all the combinations of good X and good Y that can be produced when all available resources are used efficiently.
Given a level of:
- Resources (Physical capital, labor, natural resources)
- Technology
3
Q
Opportunity cost
A
OC of is the slope of the PPF
For x = (après – avant Y)/ (après - avant X)
