Ch+1.3

Ch. 1.3 Notes and Questions # 1-6 b. curve would be going to the left c. curve would be going really to the left 6. a. Resources being to run out b. there are more workers and resources
 * Production Possibilities**
 * Economists often use graphs to analyze he choices and trade-offs that people make because they help one see how one value relates to another value
 * A **Production Curve**, or graph, shows alternative ways to use an economy's productive resources
 * Drawing a Production Possibility curve**
 * To being the drawing of a possibility curve one must first decide which goods or services to examine
 * When drawing a graph you make an x axis and y axis each represent a different thing. after you plot your points you connect them and this line is called **Production possibilities frontier**
 * Trade-offs**
 * Each point on a graph reflects a trade-off
 * Efficiency, Growth, and Cost**
 * Production possibility graphs tell is important info, such as how efficient an economy is and whether it has grown or shrunk and the opportunity cost of a decision to produce more of one good or service
 * Efficiency**
 * **Efficiency** means using resources in such a way as to maximize the production or output of goods and services
 * however, sometimes economies operate inefficiently
 * **underutilization** means using fewer resources than the economy is capable of using
 * Growth**
 * When more goods are produced the economy grows and the curve on ones graph "shifts to the right" and if less goods are produced the economy the line curves to the left.
 * Cost**
 * **Cost** doesn't always mean necessarily money when speaking economically, cost is the alternative we give up when we choose one option over the other.
 * Economist explain expensive trade-offs with the **law of increasing costs**, which states that as production switches from one item to another, more and more resources are necessary to increase production of second item, therefor opportunity cost increases
 * Questions**
 * 1) It would be depicted as lower because less resources were used
 * 2) It shows whether the economy is rising or going down by the way it's pointing
 * 3) No it does not, it just means that people have been expanding their farms
 * 4) a. curve would stay to the right
 * 1) a. curve would stay to the right