o students will learn to explain how production...

OBJECTIVES: Chapter 1:3

o Students will learn to explain how

production possibilities curves

show efficiency, growth, and cost.

o Students will explain why a

country’s production possibilities

depend on its resources and

technology.

Luk_14:28 For which of you,

intending to build a tower, sitteth

not down first, and counteth the

cost, whether he have sufficient to

finish it?

Chapter 1:3

• A production possibility curve is a graph that shows alternative ways to use an economy’s productive resources.

• Production Possibilities Frontier is a line on a production possibilities curve that shows the maximum possible output an economy can produce.

Efficiency, Growth, and Cost:

• Efficiency is the use of

resources in such a way

as to maximize the output

of goods and services.

• Under utilization: or the

use of fewer resources

than the economy is

capable of using.

Efficiency, Growth, and Cost:

• GROWTH: When an

economy grows,

economists say that the

production possibilities

curve has “Shifted to the

right.”

Efficiency, Growth, and Cost: • Costs: Economists explain

these increasingly expensive trade offs, through the law of increasing costs, this principle states that as production shifts for making one item to another, more and more resources are necessary to increase production of the second item.

• Therefore the opportunity cost increases.

Efficiency, Growth, and Cost: • Technology and

Education: Both human and physical capital reflect a vital ingredient of economic growth technology.

• Technology is the process used to create goods and services.

• Technology is one of the factors that can increase a nations’ efficiency.

Discussion Activity

• Gather into groups of four and discuss and

explain what technologies need to be

updated or upgraded and explain the

reasons why you chose what needs to be

updated.