The Center for Learning & Teaching at Penn State Berks worked with Dr. Lolita Paff to develop these podcasts as part of an Economics blended learning project.
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Consumer Surplus - see transcript below
Profit - see transcript below
Factors of Demand - see transcript below
Equilibrium - see transcript below
Operating Cost - see transcript below
Marginal Private Cost vs. Marginal Social Cost - see transcript below
Production Possibilities Frontier - see transcript below
Bill the Meteorologist is my brother-in-law. He is someone who does environmental testing and really is fascinated by all aspects of the weather. I basically call him a weather nerd because he watches the weather channel and he knows the names of all the correspondents. And when there's been a large rain storm he calls over to find out if we've had any storm damage or to compare snow totals in the winter.
He bought my husband a rain gauge one year as a birthday gift. Imagine my husbands' delight at opening this fascinating gift. And he expects every year that we're going to put it in the back yard so that when he calls to find out how much rain we've gotten we can compare totals. As if this is something we really wanted to track. Well, as the designated gift buyer for the family, Bill's birthday falls in the summer. And each year I am assigned the task of going to buy him a gift. We're leafing through the catalogues one Sunday afternoon and we find that The Sharper Image is having a sale on high technology rain gauges. These things are high falutin. They can measure the acidity of the rain that fell. Fabulous! We look at each other and realize this is the perfect gift for Bill.
And so, I go to the mall, King of Prussia, one of my favorite places to go when I'm heading to The Sharper Image. And I've brought thirty five dollars with me anticipating that that's what it's going to cost to buy the rain gauge. Now let's think about that. If I bring the thirty five dollars and I'm expecting to pay thirty five dollars, then I must really think the rain gauge is worth thirty five dollars. So, imagine my delight as I walk into the store and they have all those cool technology toys, and I play with things, and finally I work my way to the back of the store, where the rain gauges are, and I see the big red sign, four letters: SALE today only. And the rain gauge is not thirty five dollars, but it's on sale for fifteen.
Now I don't know if you like shopping, but for some people shopping is a hobby, it's something fun. And for those of us who enjoy shopping, and I am one of those people, finding something on sale for fifteen dollars when you were ready to spend thirty five gives you that little "woohoo!" kind of feeling. You can't believe your wonderful stroke of luck that you're going to be getting something with a value of thirty five dollars, right? That's the value I've assigned to it and I'm only going to have to drop fifteen dollars for it. That satisfaction feeling, that "Yes! I've scored a sale item, wonderful!" The savings of twenty dollars, that's what economists define as consumer surplus.
Your book defines it as net benefit but more generally, in other textbooks, it's defined as consumer surplus. And market interaction, when buyers and sellers interact to buy and sell goods, generates consumer surplus for the buyers and produces surplus for the sellers. We're going to mostly focus on consumer surplus in our course.
If you look at the packet with this podcast, you will see that there is a table on the second page that lists a number of different demanders. These are different people that have walked into The Sharper Image on any given day, hoping to buy a rain gauge. And yes, believe it or not, there are more people in there than just me looking at the rain gauges that day.
So if you look at the table, I'm the first person. I have the highest value assigned, the thirty five dollars that I was willing to spend for the gift. Of course, now that I haven't had to spend it, I've got this extra twenty dollars and I'm probably going to run elsewhere, but we won't tell that to my husband.
After that, you'll see there's Julio. He has a value of thirty dollars. And then Josan, twenty five, and Sophia and Chantal. And notice Chantal has placed a value of fifteen dollars on the good, on the rain gauge. And the price happens to be fifteen dollars. When you look at the consumer surplus column you'll see it is a zero. There is no consumer surplus when you acquire something for the price that is equal to the value you've assigned to it. If I go to the store and I think it's worth thirty five and I have to pay thirty five there is no "woohoo!" factor. I just give out the thirty five dollars. I get a good that has a value of thirty five dollars and it is an even exchange. There's no extra utility or satisfaction or gain from that. But all the people above the list from Chantal have assigned values higher than the price and are creating, for the market and for themselves, an aspect of consumer surplus.
And if you notice Mary and James, they are like, you know, most normal people who are in the market for a rain gauge. They might be willing to pay ten or five dollars but if the price is fifteen, they don't buy it. Because from their perspective, the good only has a value of ten or five dollars and it's not worth giving up fifteen dollars for something that has such a little value to them. And so the negative five and the negative ten would not occur.
And so the total market consumer surplus would be the sum of the twenty and the fifteen and the ten and the five and the zero. As you look at the consumer surplus assignment, you'll find two questions, multiple parts, asking you to now apply some of these concepts from the textbook reading and from this podcast. It's asking you to consider the value assigned, or the willingness to pay, or the value you believe you'd received, and compare that to the price that's being asked for the good, and to calculate consumer surplus and answer some questions about your understanding of this concept. Bring it to class and turn it into the drop box as specified in the syllabus.
Have a great day.
Alright, it's time to play "Let's Make a Deal," otherwise known as the Boeing and Airbus game. Now, in the oligopoly market structure we're talking about, a few number of firms that are interdependent. They operate independently and each one wants to maximize profit. But the actions of one firm have an implication and an effect on the results and actions of the other firms. So if we're looking at the market for airplanes, let's assume we only have two companies, Boeing and Airbus. Each one's a profit maximizer. And, if you look at the table in the podcast you'll see that they can individually choose to produce between zero and eight airplanes with falling prices. So, they each face the same downward sloping demand curve and then the given marginal revenue and marginal cost amounts.
So they have the same cost structure and they face the same market and if each was an independent sole monopoly they would compare marginal revenue and marginal cost and choose their optimal output quantity and maximize their profit-- if there was just one firm. The difficulty in this situation is that there are two firms. And since there are two, if Boeing produces a lot of refute planes that will impact how much profit Airbus is able generate for itself.
So one day, the executives of Boeing get a bright idea. Secretly, without the justice department finding out, they contact the Airbus executives and say, "Meet us for a long weekend in Tahiti where we can talk about how we should be behaving in this market." So the executives get their Hawaiian shirts out and they get little drinks with umbrellas in them and they're sitting on the beach discussing how to divide up the market. Knowing how the monopolist would behave, choosing an output quantity of six planes where marginal revenue equals one and marginal cost equals one. The two companies decide, "Instead of us trying to figure out independently, why don't we split the market fifty-fifty? We'll produce three planes, you produce three planes, we'll act in a coordinated fashion, and we'll receive the monopolists' outcome- positive economic profit in the long run, and excess bonuses for us in the long run."
Well, on the plane rides home, the Airbus executives begin to think a little more deeply about the deal they have just struck with Boeing. And, one of them starts to draw a little chart, a little matrix on a cocktail napkin. And so, the table that you see at the bottom of the page where Airbus can either build three or build four and Boeing can likewise build three planes or build four planes, the one executive for Airbus comes to a startling conclusion. What if we only build three planes and Boeing decides to build four? If Airbus builds three planes and Boeing builds four, when you look at the matrix at the bottom of the page you'll see that Airbus' profit would only be thirty and Boeing will have a profit of forty. This could be a huge problem, since if they both agree to build three, each would have a profit of thirty-six. If the computations don't seem clear to you right now, we will go over this in class.
The issue really is, as Boeing is flying home, their executives are realizing if we stick to the agreement, there's a huge risk for us that Boeing might cheat and build a little bit extra. Because they want to maximize their own profit. Meanwhile, the Boeing executives are also flying and home having a little champagne while sitting in first class realizing, "I wonder if those Airbus guys are going to figure this out that maybe we ought to produce four planes and have a little extra profit? Ah, maybe they're not smart enough to figure that out. It'll be interesting to see what happens."
And so, work through the problems for the "Let's Make a Deal" assignment, where the table values are replicated. And you are to define some concepts and answer some questions and we will discuss this more fully in class next time we meet.
Imagine that you're walking through your local mall and as you pass one of the gourmet cookie shops, a place like Famous Amos, Mrs. Fields, or maybe Blooming Cookies. They've got the big tray out and they are giving away free samples. But in order to get the free sample you have to fill out a questionnaire. What they're trying to do is gauge how much people are willing to pay for their cookies. What's their demand or their individual preference for cookies based on different prices?
And so on a particular day, they pass out a number of these fliers, people fill them out, and as they turn them in they get a free cookie. And so based on the information that the cookie shop has gotten, they've created a demand schedule. You'll find this on the second page of the packet. A demand schedule is nothing more than a list of possible prices and across the top, the different columns are formed by the different people that have turned in those slips. So you've got Bob, Ari, Antonio, Corillese, and Demetrie. These are the five demanders who turned in the slips and from which the cookie shop can analyze how much people are willing to pay for a cookie.
So you'll see these are very exquisite, very exclusive kinds of cookie,s because they are thinking about actually charging five dollars for one. At that very high price, the total quantity demanded would be two. Only two people, Bob and Corillese, are willing to pay five bucks for a cookie. They must be pretty special. Then they've listed other potential prices: $2.50, $1.00, $0.50 and $0.25. And as you would expect from the law of demand, as the price falls the quantities demanded by each individual grow. So Bob would be willing to buy as many as 4 cookies, same with Ari. Corillese on the other hand, seems to have a higher preference for cookies all around starting with one at the price of five dollars and going all the way up to buying eight cookies if the price was only a quarter. Economists can use the information in the demand schedule, and so can firms, to try and understand demanders' willingness to pay and to derive the market demand curve. That's the graph that you see below the table.
Now when these folks each filled out the questionnaire, if the price of a cookie is five dollars how many would you be willing and able to buy? They filled it out at a particular moment in time. At that moment, they had a certain amount of wealth and a certain amount of information and there was a particular state of the world. If any outside event occurs or some state in the world changes, each one of them might want to go back to the gourmet cookie shop and say I need my sheet back. Those numbers that I put on there, they're not quite right. I have different information now and my situation has changed. And they might want to change those numbers. Sometimes they might want to make the numbers bigger and other times they might want to make them smaller. And so the demand schedule reflects the state of demand at a particular moment holding everything else in the world constant.
The title of this podcast talks about the factors of demand. If any of those outside factors change, then the underlying numbers behind Bob's choices and Ari and Antonio, etc., those numbers might change. Those five factors of demand are the change in the number of buyers, changes in the price of related goods, a change in demander's income or wealth, somewhat on a macro level, changes in tastes or fashion, how do people feel about cookies, and then changes in demander's expectations about the market price. Like, what do you think might be happening in the market for cookies down the road?
The podcast assignment asks a particular question related to each one of the five factors of demand. When you look at the first question it will be dealing with related good and how Corillese might want to change the numbers she has in the before column. Now, imagine that Corrilese fills out the questionnaire and as soon as she is finished turning it in and is eating her cookie, her sister runs up to her and says, "You'll never guess! Starbuck's is giving away free cookies and free coffee. It's their one thousandth customer celebration in the mall. Let's go!" Well then, would Corillese really want to spend five bucks for just a cookie when she can run down to the other end of the mall and get a free Starbuck's coffee and a treat there for nothing? She might want to change all of these numbers in the after column and that is what you are now going to be asked to do. And then think about how that would make the demand curve change its location, shift to a new location. We will discuss that part in class.
The second question talks about the number of buyers. There was a certain amount of foot traffic going through the mall on the day that the gourmet cookie shop was handing out the samples and asking people to fill out the questionnaires. Think about what happens to mall traffic on Black Friday. Black Friday is the day after Thanksgiving and many, many, many people head to the mall. Think about how the current numbers, 2, 4, 9, 12, and 17... Think about how those would change on Black Friday. That there'd be many more people at the mall. How might that affect how the gourmet cookie shop supplies cookies that day, and how many people want to buy cookies that day? The reverse situation, during a blizzard, what happens to mall traffic and what would happen to all the numbers that people put on those little forms to buy cookies?
The third one asks about income and wealth and is in relation to Ari's situation. Now, Ari filled out the sheet and notice, he didn't want any cookies until the price dropped to a dollar. And it looks like the most he is willing to part with is a dollar. And, however many cookies that will buy him was what he wanted to acquire. What if Ari had just been to the local five and ten and had purchased a lottery ticket? And he finds out that he has won the lottery. How might that impact his desire or preference for demand individually for cookies now that he is going to be a millionaire? Complete the table and we'll discuss in class.
The fifth question deals with tastes and fashion. This really doesn't mean what if the gourmet cookie shop changed its recipe. They're not allowed to do that. There's a certain kind of cookie sold and a certain price. And, that's it. Tastes and fashion deal a lot more with how people perceive cookies. If you think about how over the last several years low carb diets have become one of the best ways to lose weight or a popular eating trend, how has that impacted how people feel about buying cookies, eating them in public, spending a large sum of money on Krispy Kremes, or anything else That's loaded with carbs. So a change in tastes or fashion really means people in society view the good differently. And in general, all the numbers might increase if the demand has increased, or would decrease if all of a sudden it's just not socially acceptable. It's not cool to be walking around the mall eating a cookie. Complete the question and bring it to class.
The last two ask you to examine a new story and then to consider Demetire's recorded quantities. Look at the values in the table and try to understand what's going on with Demetrie. And, come up with an explanation as to why his numbers look very different than everyone else's in the table.
I'll see you next time.
II live in Montgomery County and I like to do shopping as you've probably already heard in various lectures in class. And one of the places I love to go shopping is Rice's Flea market. I tend to go on a Tuesday when it's not too crowded. And, after a morning of picking out bargains, my favorite place to stop for lunch is the pizza vender at the end of the third aisle. And each week that I happen to be shopping, I'll round the corner and I'll head up to the vendor. And, he has a daily special which is pretty much consistent" two dollars and twenty five cents for a slice of pizza and a soda.
So, you can imagine my surprise one day when I've been shopping all morning, I'm ready to have my lunch, I have my two dollars and twenty five cents out, and as I round the corner, there is this very, very, very long line to the pizza vendor. It stretches twenty odd people in front of me. This has never happened. And I am wondering, "What is going on?" Since when has pizza gotten so popular with this particular vendor at this particular time? And, so, I'm standing in line and behind me the line is also continuing to grow and I'm... you know? Short. So I'm trying to peak around people in front of me to find out what's the deal? And I inch a little closer. And I'm hot and hungry and tired and getting a little crabby. And as I get a little closer, I'm finally able to see around the folks in front of me where there's a large sign that says "One day special. A dollar. A slice of pizza and a soda." This is what has caused the very, very, very long line.
Now, the pizza vendor has clearly never studied microeconomics with me or anyone else here at Penn State Berks because he didn't bring any extra pizzas. He is shocked, as well, at the very long , long, long line. And I'm hungry and I'm thirsty and I'm still getting crabbier. And I start to realize that there is a small stack of pizza boxes that are quickly dropping in number and dropping in number. And I realize if I wait my turn, there won't be any pizza left. And I will be very disappointed. And so, I have to think, "What am I going to do? How am I going to get around this? What is the solution to this market problem?" And, I realize I need to bid up the price. I need to make sure he has enough incentive to set a little pizza a side for me, so that by the time I get there, there will be a slice waiting.
And so, much to the dismay of the people in line in front of me I call out, "Hey Buddy! Two bucks. I'll send it up to you. Put a slice and a soda aside for me please." Now, can you imagine what the people in line in front of me are doing? They're turning around and they're looking at me with death in their eyes thinking, "How could she do that? She's going to get a slice of pizza and she's willing to pay more for it. We are now stuck. Maybe we won't get a slice, or worse, maybe he will raise the price for everyone." And the people in line behind me are also looking at me thinking, "Way to go. Thanks a lot. We just wanted our slice at a dollar and with a nice soda. Thanks a lot."
This is what happens when a market is not in equilibrium. The normal equilibrium price, where the vendor can sell his slices and not have anything extra at the end of the day and people were normally prepared to spend two dollars and twenty five cents--that's equilibrium. Where the quantity supplied and the quantity demanded would be equal. But on this particular day, by mistake, by experiment, we're not really sure; the market price is set below the equilibrium price. The price of a dollar is too low for the amount of interest in pizza at that price. So at the price of a dollar, the quantity supplied, if you look at the graph in the packet on the second page, the quantity supplied by all the other vendors, who'd be looking at this guy thinking, "Why is he only charging a dollar?" The general quantity supplied would be two slices. And at that very low price of a dollar, the quantity demanded would be seven. This is an out of balance situation.
When the quantity demanded is greater than the quantity supplied, you have a shortage. And when there is a shortage, the buyers bid up the price. The people with the most demand, the hungry people, the ones who are dying for that slice of pizza and a soda, people like me, start to call out, "Yo! I'll pay you two dollars! Put some aside for me!" Now if he changes the price on the sign from one dollar to two, some people in line are going to be like, "You know what, I'm not that hungry. For two bucks I'm going to go get something else. Maybe a funnel cake or something else to eat here at the market." Other people, who think that two dollars is perfectly acceptable, will stay in the line. And so the market price will be bid up by the buyers. And a new equilibrium, closer to the two dollars and twenty five cents that's the typical equilibrium price, will be achieved. In the end, markets move toward equilibrium.
This is no different than when a concert is going to be held. And the price of the tickets might be eighty dollars, but the stadium might only seat or the arena might only seat, twenty thousand people. And there are fifty thousand people that want to see whoever it is that's in concert. Scalpers, they're not the ones raising the price, they're just sort of testing the waters to see how many people would be willing to pay a whole lot more to get into that concert. We'll discuss this more thoroughly in class.
Please work through the problems assigned with My Pizza Habit and I'll see you in class.
Our son, Bobby, has quite the mind for finances. And so, at the end of the school year he decided he wanted to start his own lawn mowing business. And so, we negotiated with him a rental cost of which is thirty dollars per week for the use of our lawn mower, weed whacker, and other lawn care supplies, gasoline etc. And he negotiated with all the neighbors on our street to cut their lawns. There are ten houses on our street. And so, Bobby can either cut no one's lawn, quantity equal to zero. Or cut everyone's lawn, quantity equal to ten. He has no other alternatives because if he cuts some of the lawns and others aren't cut, the people who didn't have their grass cut are going to be a little bit disappointed because their yard will look messy. So it's an all or nothing thing.
He gets the thirty dollars per lawn and pays us the equipment rental of thirty dollars a week. And then he's got a variable cost of two hundred and fifty dollars which are his time and effort, a return for his actions, as well as perhaps paying a friend to help with some of the weeding and gasoline and weed whacker string, etc. So he has a variable cost of two fifty, fixed cost (rental cost) of thirty dollars and he chargers thirty dollars per lawn. And so, when he mows ten lawns at a price of thirty dollars, he takes in three hundred dollars. Subtract all of his total costs and he has a surplus, or a positive profit, of twenty dollars.
Now, I know that doesn't sound like a whole lot but he's a fairly young boy. And in addition to his allowance, he is bringing in twenty dollars a week. This means that he can rent video games pretty much whenever he feels like it. And he can go and have pizza, or a ham and cheese hoagie at Franklin Brothers around the corner whenever he wants to. And so he's sort of become the big shot on the street and his friends are like, "Check him out. He's got money for a new scooter. Look at all the fun he's having. And he's buying ice cream whenever he wants to." And life is good in July.
Now of course, he's got friends on the street, Troy and James who I will just refer to as T and J after this. And they look at the situation Bobby's got for himself and they realize, "You know, we want in on this action. We live on this street too, and there's no reason for him to be raking in all this money." So they figure out how they can handle running this business similarly. And they come up with a price of twenty six dollars per lawn. And they head to each and every one of the neighbors and put a little flier in their mailbox, all ten houses, saying, "T & J's is now open and we would be willing to do your lawn for twenty six dollars." This means that the next time Bobby shows up and says, "I'd like to mow your lawn today. Is that alright? And it will be thirty dollars." Each neighbor says, "You know Bobby, we signed on with you first and so we do feel some loyalty. But now that T & J's is available, you have to charge us only twenty six dollars or we're going to be forced to switch." So, while the life is good in July, he is now facing a much lower price, twenty six dollars a lawn, in August.
What are Bobby's options? It's still mow ten lawns or mow none. Which would be, when quantity is equal to zero, that's a shut down. And if he operates what's going to be Bobby's operating profit, or perhaps operating loss? That's what you're going to be asked to compute in the assignment attached to this packet. Bobby is not happy and he has to start thinking about long run. "Alright, how many weeks do I think T & J are going to be able to hold out and do this? He also might be wondering and you will be asked to answer, "How is it that T & J can afford to charge only twenty six dollars?" What might be going on here? What should Bobby's short run decision be? Should he continue to operate or should he temporarily shut down? What is the decision rule that you can find in your text book in the appropriate chapter for operating or temporarily shutting down? And in the grand scheme of things, what if they decided to lower the price even further to twenty four dollars a lawn? What should Bobby do then? What would be his short run operating loss? And what are the criteria, what's the decision rule for exiting the market permanently in the long run? How are the short run decision and the long run decision different?
Answer the questions to the best of your ability and bring them to class and we will discuss the next time we meet.
This is a story of Bubba's Beef jerky factory and Javier and Monique's afternoon on the riverside. Javier and Monique, like many young people, enjoy spending time out of doors. They might be sunning themselves, having some beverages, while they enjoy some music, or they might go tubing down the river, or might spend the afternoon mountain biking, just loving the outdoor wildlife. The river lapping along beside them is a very soothing, calming sound. Until, Bubba's Beef Jerky Factory opens up upstream.
Now, Bubba's Beef Jerky Factory produces beef jerky, a product that neither Monique nor Javier likes to eat. So they have no dealings with this factory and yet the factory is up the road producing beef jerky for people who do like to partake of that. And they are spewing pollution into the air and into the water.
And so what had started out to be a very nice unpolluted day, for Javier and Monique has now become a smelly overcast wretched kind of day. The sky looks clear but as you inhale the breath of fresh air, it's not a breath of fresh air anymore. It has a terrible, terrible odor. And while they're trying to figure out what that horrible smell is, they look to the river and instead of seeing the sunlight glimmering, they see dead fish and scum floating on the water and they don't know what's happened.
Now they decide to take a little walk upstream and they see the smoke spewing from the smoke stack from the factory. And so they approach the beef jerky company and they knock on the door and they say, "We'd like to talk to the person in charge please." And the person in charge comes to the front reception area and says "What can I do for you?" And they say, "Well, are you aware of how smelly the river has become and the air all downstream has been fouled by stuff coming out of your factory?" And the owner of Bubba's Beef Jerky, Mr.Bubba, replies, "Well I don't have to worry about that. I just look at my costs. I look at how much I can sell my beef jerky for and that's all I'm concerned with."
Now as you look at the information in the packet you will see that Bubba's Beef Jerky can decide to produce between zero and eight cases per hour. There are two addition columns. One says total private cost. That's what Mr.Bubba was talking about when he was saying, "I only have to worry about my cost." And then there's the total social cost. As you've hopefully read from the chapter, there are sometimes differences between the private costs that a firm or an individual might experience and the total cost or social cost to society. Items like pollution cause a cost to market participants and perhaps even nonmarket participants. Javier and Monique don't even buy beef jerky and yet, they're experiencing an external negative cost.
And so when you look at those two columns you are going to be asked in the assignment to compute the marginal private cost and the marginal social cost. Remember that marginal cost is changing. Total cost over the change in the quantity. And then consider how much the selling price of a case of beef jerky is and determine how many units Bubba's does produce right now, and how much is the socially optimal quantity? And we will discuss positive and negative externalities the next time we meet. Have a good day.
Economists very often use models, simplifications of the real world, in order to understand a simple case and then extrapolate those understandings into the more complex real world setting. The production possibilities frontier is an example of a very simple model of an economy. And instead of producing many, many different goods and using a variety of inputs, the nation really only produces two goods: milk and honey. And for argument's sake, we're going to say that they're produced with the same resources. They are either really special cows or really special bees it doesn't matter. But the same resource is used. And the country can decide to produce either 40 units of milk or 70 units of honey.
That curved graph that you see there that's labeled PPF is the production possibilities frontier. It's the range of possibilities for output for this particular country. Now, whether they end up at the zero milk, 70 units of honey point, or any other point along the way, is a reflection of the values and the desires of that particular society.
Sometimes the axis might say guns and butter, where guns might be symbolic for military spending and butter symbolic for consumer spending. A very dovish non-war based society would be producing lots of butter. And a society that has a strong military buildup would be producing more towards the axis where the guns are labeled.
So the points along the way represent efficiency from an economic stand point. All the resources, the bees or the cows, are being utilized. And there's no wasted resource. All the grass is being eaten and all the flowers are blooming so that the honey can be produced, etc. Points inside the curve represent inefficient output. There could be some resources used and you could have more milk and honey. Points outside of the curve beyond, so at quantities of 50 or 60 for milk or 80 or 90 for honey or anything out to the right for the frontier, are not yet efficient.
Each production possibilities frontier is drawn with a given state of technology and resources. An economic policy is often geared toward figuring out where we are on the frontier. And, if we're not on the frontier, what we can do to get there? And, ultimately what types of policies would help the nation expand its production possibilities frontier?
Review the packet after listening to this podcast and answer questions one through three. And, we will discuss them the next time we meet.