A graph that shows the combination of output that the economy can possibly produce given the available factors of production and the available production technology
Production possibilities frontier
a graph-combinations of output that the economy can possibly produce-Given the available
Factors of production
Production technology
Microeconomics
The study of how households and firms makes decisions; and how they interact in markets
Opportunity cost of producing one good
Give up producing the other good
Slope of the production possibilities frontier
Circular-Flow Diagram
A visual model of the economy that shows how dollars flow through markets among households and firms
Decision Makers
Firms and households
Inefficient levels of production
Points inside production possibilities frontier
Markets for inputs
Firms – buyers
Households - sellers
Firms
Produce goods and services
Use factors of production / inputs
