Production Possibilities Curve, Opportunity Cost, Scarcity
What does a Production Possibilities curve look like?
(PPC)or(PPF) What is it?
In this picture of the PPC you see that there are 4 letters, and all 4 of them have a meaning.
As you can see the letters A B and C is on the blue curve which means this country is using all of its resources to make Refrigerators and cars. But X and Y are not on the curve.
Why is that? What does that mean?
X means that the counrty is only using some if its resources to make an equal amount of both refrigerators and cars. Y is where the country is trying to use more than what they already have. This point on the graph is impossible to achieve because they do not have enough resources to make it happen.
Here's another example: if a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown instead (potatoes, tomatoes, pumpkins, etc.). In both cases, a choice between two options must be made.
Question: Describe some of the opportunity costs when you decide to do the following.
A. Attend college instead of taking a job
B. Watch a movie instead of studying for an exam
C.. Ride the bus instead of driving your car
Example: Precious metals: gold, silver, platinum, uranium, plutoniumPrecious gems: diamonds, emeralds, sapphires, etc.
Question: The potential benefit lost to acquire something else is known as
D. Comparative Advantage
E. Economic Efficiency
when people demand a resource more than how much there actually is, then that resource is scarce.
A resource like water isn't considered scarce because there is an infinite amount of it aka a renewable resource.
Supply and Demand
Resources (MLA Format)
"Production–possibility Frontier." Production–possibility Frontier. Wikipedia, 9 Apr. 2015. Web. 27 Apr. 2015. <http://en.wikipedia.org/wiki/Production–possibility_frontier>.
"Opportunity Cost." INVESTOPEDIA. Web. 27 Apr. 2015. <http://www.investopedia.com/terms/o/opportunitycost.asp>.
"Wikipedia." Scarcity. 23 Apr. 2015. Web. 27 Apr. 2015. <http://en.wikipedia.org/wiki/Scarcity>.
"The Law of Supply and Demand." Law Of Supply And Demand. Web. 29 Apr. 2015. <http://www.investopedia.com/terms/l/law-of-supply-demand.asp>.