10 am section

Monday, September 18, 2017

10:10 AM

-straight line PPF -> oc of production is constant

 

-accurate?  Assume no T produced.

 

 

 

Now assume factors of production are different

-some pro-level all star, all american, division 1, top draft, pole position, tea workers

  • Start from 0 T, move tea experts out of W first
  • Cost of T less than 1/6  W / T
  • Start from only making one watch.  Move last worker out of W.  No good T workers left.  OC high
  • **cost of production is not constant**

 

Increasing costs

 - OC of producing X is low when not much X is produced. 

 - OC of producing X is high when a lot of X is produced.

  • PPF is bowed out or not straight

Exercise

In US is OC of TVs high or low (incr costs)?  No TVs are produced in US so oc of TVs is low

 

In US is OC of movies high or low (incr costs)?  High because movie industry is large

Productivity

  • Technology is not computers, phones, cars, etc (capital)
  • Technology = methods for using capital or any other resource
    • Ex: assembly line = technological improvement.  Workers only do one task repeatedly. 
    • Result: more output (or less) without a change in resources.  "magical output"

 

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