Ch 3: 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 3: 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

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.

Opportunity Cost: Definition & Examples

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.

How to Calculate Opportunity Cost

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.

Applying the Production Possibilities Model

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.

Shifts in the Production Possibilities Curve

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.

Production in Traditional, Market, Command & Mixed Economic Systems

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.

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

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.

Chapter Practice 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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