(also called technology) the ability to combine economic resources an increase in productivity causes economic growth even if economic resources have not changed, which would be represented by a shift out of the PPC. When the opportunity cost of a good increases as output of the good increases, which is represented in a graph as a PPC that is bowed out from the origin for example Julissa gives up 2 2 2 2 fidget spinners when she produces the first Pokemon card, and 4 4 4 4 fidget spinners for the second Pokemon card, so she has increasing opportunity costs. When the opportunity cost of a good remains constant as output of the good increases, which is represented as a PPC curve that is a straight line for example, if Colin always gives up producing 2 fidget spinners every time he produces a Pokemon card, he has constant opportunity costs. The underemployment of any of the four economic resources (land, labor, capital, and entrepreneurial ability) inefficient combinations of production are represented using a PPC as points on the interior of the PPC.Īn increase in an economy's ability to produce goods and services over time economic growth in the PPC model is illustrated by a shift out of the PPC.Ī decrease in output that occurs due to the under-utilization of resources in a graphical model of the PPC, a contraction is represented by moving to a point that is further away from, and on the interior of, the PPC. Inefficient use (under-utilization) of resources
#PRODUCTION POSSIBILITY CURVE DIAGRAM FULL#
The full employment of resources in production efficient combinations of output will always be on the PPC. The value of the next best alternative to any decision you make for example, if Abby can spend her time either watching videos or studying, the opportunity cost of an hour watching videos is the hour of studying she gives up to do that. Using the last portion of the handout as a guide, students will work in pairs or small groups to find a contemporary example that could influence the production possibilities curve.Īfter completing this section of the handout, students will post a link to their example on an interactive whiteboard or Padlet.Īs a class, display the students' examples and practice graphing the changes to the production possibilities curve.(also called a production possibilities frontier) a graphical model that represents all of the different combinations of two goods that can be produced the PPC captures scarcity of resources and opportunity costs. How would this change impact the production possibilities curve? Watch this clip and consider the impact of the Industrial Revolution on productivity. Video Clip Four: Mechanization and the Assembly Line: PPC Example (0:44).
How would this change in the adult labor force impact the production possibilities curve? Watch this clip and consider the impact of the 1918 influenza pandemic on the US labor force in the early 1900's. Video Clip Three: 1918 Influenza Pandemic: PPC Example (2:58).How would this change in natural resources impact the production possibilities curve? Watch this clip and consider the impact of the purchase of Alaska on U.S. Video Clip Two: Alaska: PPC Example (1:15).Watch this clip and consider the impact of the Baby Boom generation on the US labor force in the 1970's-1980's. Video Clip One: Baby Boom: PPC Example (0:38).Students will view the following video clips on the Production Possibilities Curve Handout (Google Doc) to graph the production possibilities curve based on various examples:
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