Sign In | Subscribe
Start learning today, and be successful in your academic & professional career. Start Today!
Loading video...
This is a quick preview of the lesson. For full access, please Log In or Sign up.
For more information, please see full course syllabus of AP Microeconomics
  • Discussion

  • Study Guides

  • Download Lecture Slides

  • Table of Contents

  • Related Books

Bookmark and Share
Lecture Comments (6)

1 answer

Last reply by: Professor Jibin Park
Wed Aug 17, 2016 1:49 AM

Post by Jeffrey Ho on August 17 at 01:33:19 AM

Will PPF graphs always provide us data for the graphs, or is there a possibility that we would have to implement our math skills to find different points on the AP tests?

1 answer

Last reply by: Professor Jibin Park
Sat Mar 21, 2015 5:20 PM

Post by Shirley Yang on March 21, 2015

Is opportunity cost always a positive number representing one of the two items?

1 answer

Last reply by: Professor Jibin Park
Tue Feb 18, 2014 11:25 PM

Post by Mengyao Zhang on February 18, 2014

Why the PPF  is normative but possitive  . Doesn't every point of the graph came from  if  A uses ..resource, B uses..resourse?  

Production Possibilities Frontier

  • A Production Possibilities Frontier lists the alternative combinations of choices given limited resources, which is positiveeconomics.
  • The best point of efficiency is a normative issue that depends on different sets of values.
  • For most products, the law of increasing opportunity costs apply which means more and more resources are required to produce the same amount of goods.
  • Some PPF graphs have a constant opportunity cost in which the same amount of resources are required to produce an additional amount of goods.
  • The Production Possibilities Graph shows the opportunity cost of deciding to produce one product over another.

Production Possibilities Frontier

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:08
  • I. Basic Economic Concepts 0:48
  • Production Possibilities Frontier 1:23
    • Points of Efficiency
    • Points of Underutilization
    • Famous 'Guns or Butter' Analogy
  • Increasing Opportunity Cost 2:59
    • Law of Increasing Opportunity Cost
    • Example: Economy of DVDs and Wine
  • Constant Opportunity Cost 6:26
    • Definition of Constant Opportunity Cost
    • Example: Economy of Soda and Flags
  • Example 1 9:35
  • Example 2 11:06
  • Example 3 12:54
  • Example 4 14:19
  • Example 5 16:28