UNIT 1 SECTION 2 Opportunity Cost and Production Possibilities Frontier

I can Interpret production possibilities frontiers define and create an example of opportunity cost

What is opportunity cost Is the cost of the next best alternative use of money, time or resources when one choice is made rather than another Would you rather buy an iphone or Android? Would you rather work at Hollister or American Eagle? Would you rather make brownies or cookies with your last cup of sugar?

The Trade-Off The trade off is the alternative that must be given up when one choice was made. What phone did you chose? Where did you decide to work? What did you do with the last cup of sugar you had? The next best thing was your trade off

PPF 101 To illustrate opportunity cost, economists use the production possibilities frontier or PPF.

Productivity goes down Productivity goes up Producers are idle Less workers No resources Factories increase production More workers More resources How the PPF changes

Productivity goes down Productivity goes up Changes in the PPF

Wrap Up What are some things that can make a PPF change? Give me examples of opportunity cost and the trade off ?