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Ch 2: Scarcity, Choice & The Production Possibilities Curve

About This Chapter

Watching the brief video lessons in this chapter can give you an overview of economics and the concepts of scarcity, opportunity cost and efficiency. Take quizzes and the chapter exam to make sure you understand the material.

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.

8 Lessons in Chapter 2: Scarcity, Choice & The Production Possibilities Curve
Test your knowledge with a 30-question chapter practice test
Economic Scarcity and the Function of Choice

1. Economic Scarcity and the Function of Choice

Discover the foundation of the social science of economics as we explore the basic economic problem of scarce resources and unlimited wants using key definitions that create a framework for understanding everyday behavior in a nation.

Opportunity Cost: Definition & Real World Examples

2. Opportunity Cost: Definition & Real World Examples

Learn the most important concept of economics through the use of real-world scenarios that highlight both the benefits and the costs of decisions. Opportunity cost is a simple yet powerful principle that reveals how to make the best economic decisions possible, and it explains why people make the choices they do.

How to Calculate Opportunity Cost

3. How to Calculate Opportunity Cost

Learn the formula that reveals the economic value in any major choice between two possibilities. Every choice involves tradeoffs, and opportunity cost shows you how to measure these tradeoffs.

Applying the Production Possibilities Model

4. Applying the Production Possibilities Model

Producers in the economy use a visual model, called the production possibilities curve, to make the most efficient production decisions and maximize output. Learn how this model reveals the tradeoffs of every production decision with the simplified example of an economy that produces only two goods.

Shifts in the Production Possibilities Curve

5. Shifts in the Production Possibilities Curve

In this lesson you will learn how changes inside an economy lead to changes in the production possibilities of a nation. See how different scenarios from everyday life lead to shifts in the production possibilities curve.

Production in Traditional, Market, Command & Mixed Economic Systems

6. Production in Traditional, Market, Command & Mixed Economic Systems

This lesson discusses how market, traditional, mixed, and command economic systems operate. The key features, benefits, and drawbacks of each are summarized. Learn how the economic systems answer the three basic economic questions that face all economies.

Factors of Production: Definition & Examples

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.

Using the Production Possibility Curve to Illustrate Economic Conditions

8. Using the Production Possibility Curve to Illustrate Economic Conditions

This lesson explains the economic concept of the production possibility curve, which is used to illustrate conditions and make good business decisions. Trade-offs, economic efficiency, economic inefficiency, and economic growth are explained.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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