von Francisco Campo Vor 10 Jahren
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This is more functional, and it is made from the creation of four additional social institutions: 1- Company. 2- Markets. 3- Property Rights. 4- Money.
This is not functional, because planners don't know production possibilities and preferences of people, so, the production ends being located within the FPP. Also, often what they produce to be inadequate.
When a person is more productive than another, it is said to have an absolute advantage. The absolute advantage is about the comparison of productivity levels, like output per hour.
A person has a comparative advantage when it is able to perform a certain activity at a lower opportunity cost than anyone else. The comparative advantage involves on comparing the opportunity cost.
Increased capital resources, including human capital.
Development of new goods and better ways of producing goods and services.
At a point on the PPF it can not be possible to produce more than one good without giving up another that it provides more benefit. Thus, Product Placement Efficiency is the point of interception between the marginal benefit and marginal cost, in other words, when these are equal.
This is the benefit have obtained from consuming one more unit of the same product.
This is the opportunity cost of producing an additional unit of the same product.
Opportunity cost is an alternative that must be forgone of an good for another. Besides, it is a proportion, for it is the reduction in quantity of a good divided by the increase in the quantity produced of another, as it moves along the PPF.
We can achieve production efficiency if we produce goods and services at lower cost. Production within PPF is inefficient when the resources are unused, or misallocated, or both ways.
The reachable area shows what it can be produced, and unreachable area shows the scarcity and unmet production.
Production Possibility Frontier is the boundary between the goods and services what they may occur and not, between two areas reachable and unreachable.