PPF

Law of increasing costs- curve on a ppf means that the goods do not change in equal proportions. Curve indicates that the opportunity cost is not equal. (curve means increasing costs the further you go across the y axis the more of an opportunity cost) Straight line indicates that the opportunity cost is equal.  

Incentives- benefits that encourage people to act in a certain way

Utility- the benefit or satisfaction gained from the use of a good or service

Economize- make decisions based on what you believe is the best combination of cost and benefit

Opportunity cost- the value of the next best alternative

Trade off- Alternative people give up when they make choices 

Cost benefit analysis- weighting the benefits of an action against its costs

Factors that affect the ppc positively

• Accumulation of capital

• Technological advances

• increase in population

• more land or improvements to land

Factors that affect the ppc negatively

• decrease in population

• loss of land

• decrease in productivity due to aging population