The production possibilities curve graph shows a combination of outcomes when two items are produced. It shows how the production of one product effects the production of another when production is increased or decreased. The PPC curve shifts to the dotted position due to improvements in technology which increases productivity.
The graph demonstrates scarcity, opportunity cost and choice by showing that in order to produce one product; we have to produce less of the other. We must make a choice by deciding which product we need more of.
One opportunity cost I have experienced by returning to school is that I work less and therefore make less money. More school, less work. A choice I have made based on scarcity would be choosing returning to school over guitar lessons. Deciding to complete my post secondary education in hope of a better career over continuing my hobby will hopefully pay off in the future. In this case time and money are limited.
Hi Anil,
ReplyDeleteI like the graph you chose to represent the production possibility curve. It shows all the points such as scarcity, technological change, inefficient points inside the curve and unattainable production outside the curve.
Hi Anil,
ReplyDeleteIt's a good example of opportunity cost. When we are learning this terms in economy, and thought that it should only be using in the economy world. But truly, it is a useful terminology applies to our daily life.
Thanks,
Randy Lui