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point inside the curve
inefficient
a model graphically demonstrates…
scarcity, trade-offs, opportunity cost, efficiency
step 1 for use of econ model
explain concept in words
step 2 of econ model
use numbers as examples
step 3 for use of econ model
generate graph from numbers
step 4 for use of econ model
make generalizations using graphs
3 key assumptions
only 2 goods can be produced at once
full employment of resources
fixed resources; things don’t change
increasing opportunity cost
resources are very different and there is a curve
constant opportunity cost
resources to produce are very different
when you produce one to lose the same amount as the others
the law of increasing opportunity cost
when all the resources are being used, an increase in the production of one good will lead to the greater forgone production of another good
Note 
Flashcard (71)