1.2: Choices in Production and the Production Possibilities Curve
- Read this chapter to learn about the factors of production and the way they are combined in production. Use the production possibilities curve to represent the alternative combinations of goods and services that an economy can produce. Make sure to understand how the curve represents efficient, inefficient, and unattainable levels of production. Pay attention to how economic growth can be represented by shifts in the curve. Also in this chapter, learn about how economic systems compare.
- Watch these two videos to learn how a production possibilities curve is constructed. Pay close attention to the way changes in resources affect the PPC curve. As you will see, some combinations of products may be unattainable, given the limited existing resources, whereas other combinations of products may be inefficient as they leave some unused resources. The PPC curve helps us find levels of production that utilize all of the available resources in the economy.