Daily Warm up Activity (HOT Section Notes):
We have a Free Market Economy in the United States.
What are some advantages of this kind of economy? We.
However, do not have an unregulated free market system.
What restraints/regulations are put in place to regulate
trade?
Unit One: Learning Objectives:
North Clackamas School District Social
Studies Priority Standards:
• Econ 53. Describe characteristics of
command, market, traditional, and mixed
economies and how they affect jobs and
standards of living.
• Econ 59. Demonstrate the skills and
dispositions needed to be a critical
consumer of information.
Lesson Two: Daily Learning Target
I Can define and explain in writing the
following key Economic concepts:
Production Possibilities Graph
Efficiency
Underutilization
Producers have options. Should a
farmer grow corn or broccoli?
A Production Possibilities Graph
• A Production Possibilities Graph shows
alternative ways of using a country’s or
producer’s resources.
• If a farmer uses more of his land to grow
corn, he has less land for broccoli.
• Every decision has its cost.
What is the cost of producing more
automobiles?
Efficiency
• An economy is efficient when it uses
resources in such a way as to maximize
production.
• Why is it important to be efficient?
Look at the graph. Where is efficiency
occurring?
Look at this graph. Where is efficiency
occurring?
Underutilization
• Underutilization is the opposite of
efficiency.
• Underutilization occurs when an economy
uses fewer resources than it is capable of
using.
• Why do producers avoid the
underutilization of resources?
Look at the graph. Where is
underutilization occurring?
The Production Possibilities
Frontier
• The line on the graph that shows the
maximum possible production is called the
production possibilities frontier.
• At the frontier, efficiency is occurring.
• However, new technology can shift the
frontier. Think about it!
Look at the graph. Where is the
production possibilities frontier?
Don’t Forget Scarcity!
• A producer cannot produce everything.
• A producer must make choices.
• Remember: It’s all about scarcity. Our
resources are limited but our wants and
desires are unlimited.
It’s all about corn or broccoli.
We can’t have it all.
Questions for Reflection:
• What does a production possibilities graph
show?
• Define efficiency.
• Why is it important to be efficient?
• Define underutilization.
• What problems are created by
underutilization?
• What is the production possibilities
frontier?
Use the following information to create a PPC for McDonalds during
Lunch hour. Biff and Skip, working at maximum efficiency can produce
the following two products:
Big Macs
Large Fries
0
25
5
15
10
5
15
0
1. Plot a point showing
Underutilization.
2. Plot a point showing
future production
possibilities.
Problem Solving Activity #3: Create two PPCs
A. For Under Armor:
B. For Starbucks
Football cleats 25/0
Grande Mocha w/whip
10/0
Socks 100/0
Black Coffee
(house blend) 18/0
Partner Practice-Econ Book
Complete the Chapter One Assessment with partner.
Answer questions 1-9 on page 20.
Turn your answers into me.
One paper per group of two.