Economics Warm-Up Take out the worksheet we were working on yesterday (Economic Decision Making- Opportunity Cost) and complete Part III on the back.

Production Possibilities Curve/Frontier

Scarcity We know that because of scarcity, we have to make choices with how we will use our resources.

Production Possibilities Curve (sometimes called a Production Possibilities Frontier) Economists have created a graph which shows the different combinations of two goods that can be produced using full employment of resources. This is very helpful in showing us what our opportunity cost is when we choose a specific combination.

I do We do You do (collaboratively) You do (individually)

The curve can move?! Sometimes the curve of a PPF can move outwards, which means GROWTH. Why? Accumulation of more capital Technological advances Increase in population Available land or improvements to land

The curve can move?! Sometimes the curve of the PPF can move inwards, which means a DECLINE in production. Why? Decrease in population (war, disease, catastrophe) Loss of land (war, natural disaster) Decrease in production due to aging population, uneducated population, less healthy population.