Ch 3: Scarcity, Choice & The Production Possibilities Curve
About This Chapter
Scarcity, Choice & The Production Possibilities Curve - Chapter Summary
The video lessons in this chapter can help students learn about the factors that affect the production of goods as well as how to use the production possibilities curve. Watch our expert instructors as they explain scarcity, opportunity cost and efficiency. Also ask these instructors any questions you may have so you can master the material and gain an understanding of:
- Economics and the concept of scarcity
- Opportunity cost and how it's calculated
- Finding the most efficient way to produce a combination of multiple goods
- Shifts in the production possibilities curve
- How different economic systems answer the three basic questions of economics
- Factors that affect production
- Using the production possibilities curve to show trade-offs and economic efficiency and inefficiency
Following each video lesson, take lesson quizzes to reinforce the material you have learned and discover what topics you may want to review. Use the timelines to go directly to main points in the video lessons, or read over the lesson transcripts to fortify your comprehension of these topics.
1. Economic Scarcity and the Function of Choice
Learn how economic scarcity influences the way decisions are made about managing resources. Explore the basics of economics and discover how the scarcity of resources affects the function of choice, the implications of economic incentives, and how the term economy is defined.
2. Opportunity Cost: Definition & Examples
Opportunity cost is a concept in economics that helps in estimating the value of different choices. Learn about the definition of opportunity cost, benefits, value, and value of time, and why the cost of an opportunity is found in the value of the next best alternative not chosen.
3. How to Calculate Opportunity Cost
Opportunity cost is determined by calculating how much of one product can be produced based on the opportunity cost of producing something else. Learn how to calculate opportunity costs to make efficient economical choices using the production of wheat versus rice as an example.
4. Applying the Production Possibilities Model
The production possibility model illustrates scarcity and efficiency. Explore how opportunity costs affect the production possibility curve and discover why it is bowed outward on a graph.
5. Shifts in the Production Possibilities Curve
The production possibilities frontier model illustrates for a nation's leaders what goods to produce, how to produce them, and for what markets. Explore how shifts in the economy lead to shifts in the production possibilities curve of a country using real-world examples.
6. Production in Traditional, Market, Command & Mixed Economic Systems
Economic measures of outputs appear differently across distinct economic systems. See the pros and cons of outputs of goods and services common to the various economic systems: market, traditional, command, and mixed.
7. Factors of Production: Definition & Examples
There are four factors of production. The four factors are inputs needed to produce a product or provide a service. These factors include natural resources, human resources, capital, and entrepreneurship.
8. Using the Production Possibility Curve to Illustrate Economic Conditions
The production possibility curve demonstrates the potential profit from a given economic condition. See how this illustrates different economic conditions through evaluating scarcity, production factors, efficiency, and opportunity costs.
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Other Chapters
Other chapters within the GACE Economics (538): Practice & Study Guide course
- About the GACE Test
- Basic Economic Concepts & Terms
- Comparative & Absolute Advantage, Specialization & Trade
- Supply, Demand & Market Equilibrium
- Determining Price in Economics
- Government Issues in Economics
- Business Organization & Decision Making
- Producers & Production in Microeconomics
- Understanding Macroeconomic Equilibrium
- Scarce Economic Resource Markets Basics
- Economic Market Structures
- Basics of Measuring the Economy
- Understanding Economic Growth and Productivity
- Inflation & Adjustment in Economics
- Unemployment Basics
- Understanding Inflation & Unemployment
- Overview of Aggregate Demand & Supply
- Fiscal Policy & Monetary Policy
- Expansionary & Contractionary Gaps
- Money & the Market
- The Central Bank & Monetary Policy
- Foreign Exchange & Trade Balance
- Overview of Inflows, Outflows & Restrictions
- Personal Finance: Consumer Decision Making
- Personal Finance: Savings & Investments
- GACE Economics Flashcards