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Lesson 1 Production Possibilities and Opportunity Cost

production to sacrifice in order to produce the guns and vice versa. The various combi-nations of goods (i.e., “guns” or “butter”) that can be produced can be plotted as points on a graph and, when these points are connected, the resultant curve is the PPF. Production possibilities analysis is fundamental to economics.

  Cost, Production, Opportunity, Curves, Possibilities, 1 production possibilities and opportunity cost