1 / 7

AP Economics

AP Economics. Mr. Bernstein Module 3: The Production Possibilities Curve September 13, 2013. AP Economics Mr. Bernstein. The Production Possibilities Curve Model A very simple model can explain a lot Highlights the importance of trade-offs in economic analysis

aricin
Download Presentation

AP Economics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. AP Economics Mr. Bernstein Module 3: The Production Possibilities Curve September 13, 2013

  2. AP EconomicsMr. Bernstein The Production Possibilities Curve Model • A very simple model can explain a lot • Highlights the importance of trade-offs in economic analysis • Helps us understand efficiency, opportunity cost, and economic growth • There are two sources of economic growth - increases in the availability of resources and improvements in technology

  3. AP EconomicsMr. Bernstein The Production Possibilities Curve

  4. AP EconomicsMr. Bernstein The Production Possibilities Curve • Simplifying Assumptions • Resources and Technology are Fixed at a point in time • Economy produces only two goods • Off the curve is Not Feasible or Feasible but inefficient • On the curve is feasible and efficient

  5. AP EconomicsMr. Bernstein The Production Possibilities Curve • A linear PPC means Opportunity Costs are constant • Example: Pizzas vs Bulldozers. At every level of production, the tradeoff in # of pizzas per bulldozer is the same • But not all pizzas and not all bulldozers are created at the same cost. Why?

  6. AP EconomicsMr. Bernstein The Production Possibilities Curve • Concave due to “Law of increasing opportunity costs”

  7. AP EconomicsMr. Bernstein Economic Growth • Expansion of an economy’s production possibilities

More Related