1. Unit 1 – Production Possibilities Curves
IGCSE Economics
Unit 1 – Production Possibilities Curves

2. Lets get Graphical….. Imagine you have 5 hours of your evening.
You have to choose how long to spend playing on Xbox and how much to spend on your homework. How can we graph this? 5 4 3
Hours Homework 2 1 1 2 3 4 5
Hours Xbox

3. Video – 7 mins
Watch the video (note: A PPF is another name for a PPC) Think about…. What does a PPC/PPF show? Why is the PPC curved rather than straight? How can we work out the opportunity cost of producing a unit of one good rather than another?

4. Production Possibility Curves
Production possibility curves (PPCs) show the maximum combined output of two or more products a firm or an entire economy can produce with its available resources
Resources are being used efficiently if they are producing their maximum output
But, because resources are limited, producing more of one product means producing less of another
PPCs are therefore a useful way of showing the opportunity cost of producing more of one product in terms of how much of another must be given up

5. Opportunity Cost? A firm producing cars and trucks
What is the opportunity cost of producing 18 more trucks?

6. Opportunity Cost?
An economy producing consumer goods and capital goods
What is the opportunity cost of producing 15 more tonnes of consumer goods?

7. PPC for Country X A F B
Pizzas (Millions) C E D
Robots (Hundreds)

8. Task
Answer the questions on the work sheet relating to the PPC shown on the board.