1. Production Possibilities

2. Target Define Opportunity Cost
Draw and explain information given on a production possibilities frontier.

3. DO NOW
Why can’t even developed countries produce everything their citizens want?

6. Rank each item in order of which one you want the most.
Opportunity Cost
Rank each item in order of which one you want the most.
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7. Production Possibilities Frontier
Production possibilities is an analysis of the production combinations of two goods that can be produced with a set of scarce resources using the available technology in a given time period.
Production Possibilities Frontier is a graphic representation showing the trade offs involving decisions about producing goods.

8. Production Possibilities Frontier
Used to calculate opportunity costs of various production decisions.
Example: Guns or butter?
Ceteris Paribus:
“all other things constant”
In economics this means that when we are talking about two resources we are assuming that everything else remains unchanged.

9. Production Possibilities Frontier
How many guns and butter can be produced at point B? How about E?
What happens to the production of butter if we increase the production of guns? Explain this in words as well as movement patterns along the curve.
What happens if increase the production of butter? Explain this in words as well as movement along the curve.
What does point A represents?
What about points H? C? Explain what each of these points represents and WHY.

10. Activity #1: Smart phone or tablet computer?
You are all citizens in a country called Technologia. Technologia produces two goods: Smart phones and tablet computers. Give the scare resource of Coltan we will determine how many of each good Technologia will be able to produce.

11. Smartphone and Tablet Production Possibilities
Round (point)
Number of Smartphones
Number of Tablet Computers
Only Tablets (A)
1 (B)
2 (C)
3 (D)
Only Smartphones (E)
Smartphones
Tablets

12. Review
1. Why do countries face a trade-off between goods such as tablet computers and smartphones?
2. In the first PPF graph, what was the opportunity cost of a smartphone?
3. In the first PPF graph, did the opportunity cost of a smartphone change?
4. What can cause the PPF to shift outward?

13. This figure shows the production possibilities for the economy of Alpha, which makes robots and pizzas
If all resources are devoted to the production of robots, Alpha can make how many robots?
If all resources are devoted to the production of pizza, Alpha can make how many pizzas?
If Alpha changes production and move from point A to point B, how much of which product is lost?
If Alpha moves from point C to point B, how much of which product is lost?
Why won’t Alpha make 6 pizzas and 1 robot?
Why won’t Alpha make 12 pizzas and 3 robots? A B
PIZZAS C D
ROBOTS

14. Practice Question…
A sports manufacturing company is trying to determine the amount of basketballs and footballs to produce. Create a Production Possibilities Frontier for the information below.
Label
Basketballs
Footballs A
900 B
800
300 C
600
500 D
850 E
1,000

15. Answer the following questions..
1. When the sports manufacturing company produces 800 basketballs, how many footballs is it able to produce?
2. If the company were to produce 500 basketballs and 300 footballs, would that production combination be inefficient or unattainable?
3. If the company were to produce 700 basketballs and 800 footballs, would that production combination be inefficient or unattainable?
4. What is the opportunity cost of moving from Point A to point B?
5. What is the opportunity cost of moving from Point E to point C?

16. Assessment: (INDIVIDUAL)
Imagine a farmer who owns a large, productive parcel of land on which she can produce either soybeans or corn. The questions that follow refer to this production possibilities schedule. Create the graph and plot the points in the table below.
Label
Soybeans (bushels)
Corn (bushels) A
1,750 B
1,500
250 C
1,000
750 D
500
900 E

17. 1. When the farmer chooses to produce 1,750 bushels of soybeans, how many bushels of corn can he produce?
2. If the farmer attempted to produce 750 bushels of soybeans and 500 bushels of corn would that production combination be inefficient or unattainable?
3. If the farmer attempted to produce 1,250 bushels of soybeans and 1,000 bushels of corn would that production combination be inefficient or unattainable?
4. What is the opportunity cost of moving from point A to point B?
5. What is the opportunity cost of moving from point E to point D?

18. Calculate opportunity cost using a Production Possibilities Frontier
Target
Calculate opportunity cost using a Production Possibilities Frontier

19. Production Possibilities..
Take notes to help you understand the PPF and opportunity cost while watching intro video.

20. Production Possibilities
Complete a production possibilities frontier for the information provided.
Answer each question on the back of the poster.

21. Individual Practice