1. Year 12 AS Economics
Ms Haron

2. Start of lesson drills Planner on the desk Pen/stationary available
21/11/2018
Start of lesson drills
Planner on the desk
Pen/stationary available
Folder/Exercise book on the desk
Date and title copied
1.1.4 – PPF – Continued
Ready to learn
Reminder of expectations every lesson
Theme 1 – Microeconomics PPF

3. Theme 1 1.1 – The nature of Economics
1.1.4 Production possibility frontiers
a) The use of production possibility frontiers to depict:
opportunity cost (through marginal analysis)
economic growth or decline
efficient or inefficient allocation of resources
possible and unobtainable production
b) The distinction between movements along and shifts in production possibility curves, considering the possible causes for such changes
c) The distinction between capital and consumer goods

4. 21/11/2018
Homework - reminder
Your homework exam questions are due tomorrow: Wednesday 7th October – P3 – IT3
Theme 1 – Microeconomics PPF

5. Last lesson we covered:
21/11/2018
Last lesson we covered:
PPF and opportunity costs
Outward shifts in the PPF
Inward shifts in the PPF
How economic growth affects the PPF
Theme 1 – Microeconomics PPF

6. Starter: Quick quiz – 5 mins
21/11/2018
Starter: Quick quiz – 5 mins
What does PPF stand for?
What does a point on the PPF line show?
Why does a movement along a PPF (e.g. from A to B) involve an opportunity cost?
Copy the sentence below and fill in the blanks with the following words: time, efficiently, resources, alternative
A PPF shows ________ maximum combinations of two goods or services attainable when all resources are fully and _________ employed. The PPF shows output for a given _____ period and with the current _______ that you have.
Theme 1 – Microeconomics PPF

7. What could cause a shift from PPF1 to PPF 2?
21/11/2018
What could cause a shift from PPF1 to PPF 2?
Economic growth, Changes in production technology or more factor inputs
Theme 1 – Microeconomics PPF

8. How is the PPF for an economy shown?
The PPF for an economy is drawn on the assumption that all resources in the economy are fully and efficiently employed
If there are unemployed workers or idle factories, or if production is inefficiently organised then an economy cannot produce on its PPF ?

9. Capital and consumer goods
21/11/2018
Capital and consumer goods
Capital Goods
Goods that are used in the production of other goods such as factories, offices, roads, machines and equipment.
Businesses do not sell capital goods, which means capital goods do not directly create revenue like consumer goods. To financially survive the accumulation of capital goods, businesses rely on savings, investment or loans.
Consumer Goods
Goods that are used by people to satisfy their needs and wants.
A consumer good is purchased for consumption and not later used for the production of another consumer good.
When economists and statisticians calculate gross domestic product, or GDP, they do so based off of consumer goods.
Example:
The same physical good could be a consumer good or a capital good. An apple bought at a grocery store and immediately eaten is a consumer good. An identical apple bought by a company to make apple juice is a capital good. The difference lies in its utilization.
Theme 1 – Microeconomics PPF

10. List at least 3 causes of a shift of PPF
If the economy is producing capital goods, then in the following period its capacity to produce should increase as it will have more resources available for production
Increase in innovation
Increase in employment
Improved management processes

11. May 2012

12. MAY 2012

13. 21/11/2018
Students need to understand that the PPF represents the production possibilities for a particular time period only, e.g. a year. The economy will have built up a stock of capital goods before, which can then be used, with other resources, to produce more capital goods and/or consumer goods. Some students might appreciate that a certain production of capital goods is needed to just balance the ones which get broken!
Theme 1 – Microeconomics PPF

14. Activity Read through the first 5 pages
21/11/2018
Activity
Read through the first 5 pages
Highlight/underline any key words
Circle any words you don’t understand
What are the 4 factors of production?
Complete the activities on
Page 5 and Page 7
Theme 1 – Microeconomics PPF

15. This last week we have covered
21/11/2018
This last week we have covered
1.1.4 Production possibility frontiers
The use of production possibility frontiers to depict:
opportunity cost (through marginal analysis)
economic growth or decline
efficient or inefficient allocation of resources
possible and unobtainable production
The distinction between movements along and shifts in production possibility curves, considering the possible causes for such changes
The distinction between capital and consumer goods
Theme 1 – Microeconomics PPF

16. 21/11/2018
Homework - reminder
Your homework exam questions are due tomorrow: Wednesday 7th October – P3 – IT3
Theme 1 – Microeconomics PPF

17. Tomorrow we will cover:
21/11/2018
Tomorrow we will cover:
1.1.4 – PPF – Consumption vs investment
Theme 1 – Microeconomics PPF

18. 21/11/2018
Expectations
Theme 1 – Microeconomics PPF