Opportunity Cost and The PPF HFAX - Fall

Aim: How does opportunity cost influence the PPF?

I. Opportunity Cost and The PPF PPF demonstrates opportunity cost. To increase product x we must give up product y. B. Opportunity cost is expressed as a ratio: What you give up Opportunity Cost = ______________ What you select

II. Ingredients for Growth The following must happen in order for the PPF curve to reach an “unattainable” point. Development of new technology More efficient labor Discovery of new resources Specialization of production

PPF Practice Possibility I-Pods Computers A 40 140 B 60 120 C 80 100 D 1. Construct a PPF Curve. 2. Calculate the Opportunity Cost of I-Pods and Computers.

Calculate Opportunity Cost and Construct a PPF Possibility Shirts Pants A 20 160 B 40 140 C 60 80 D Coffee Tea 5 190 15 30 100 50 10