Video Notes:
The production possibilities frontier is used to illustrate ___________
and __________________. In other words, we can’t have everything
we want. We must make choices.
If our economy makes more robots, what must we give up?
If our economy makes more pizza, what must we give up?
Why does opportunity cost increase as we produce more pizza or
more robots?
A perfectly efficient economy is using _____________ of its
productive resources. (all or some)
Describe what happens to the production possibilities curve as the
economy grows?
Practice:
Use the production possibilities frontier to answer the following
questions.
1. If the economy represented by the production possibilities frontier
above produced 90 thousand pounds of food, how many weapons of
mass destruction could it produce if it deployed all of its resources?
____________
2. If an economy is working at full potential producing 90 thousand
pounds of food and 2500 weapons of mass destruction, what would
its opportunity cost be if it produced 110 thousand pounds of food?
_____________
3. If an economy operating at full potential is producing 3 thousand
weapons of mass destruction, how much food could it produce?
_________
4. Which allocation combination would result in the economy having
idle or unutilized resources?
a. 120,000 pounds of food and 1750 weapons of mass destruction
b. 100,000 pounds of food and 1500 weapons of mass destruction
Power Point Notes
1. The _______________ ______________ ___________ is an
economic model.
2. It is used to illustrate ______________ __________.
3. ____________ __________ is something that must be given up in
order to have something else.
4. __________ _________ is the ________ best alternative.
5. ________ ______ - all things within a set of choices that were not
chosen.
6. Economics is the study of how people __________ ________
among the scarce resources that are available. We can’t have
everything because we have ____________ resources.
7. In order to make good decisions, we need to evaluate the choices
available and consider _____ _______ ___ ________ ____ when we
make those choices. In other words, we should always consider
_________ _____ and _____________ _______ when making
choices.