SCARCITY, CHOICE, OPPORTUNITY COST

AND
PRODUCTION POSSIBILITIES CURVE

Presented by
Lee Teck Ruey 1501aH100269 (1501PS2)
Sng Weoi En 1501aH100223 (1501PS2)

Teacher
Ms Wan Liyana Mariah
Date:
12 of February 2015
th

Introduction
What is economics?
A social science that concerns the choices of
as they manage their resources
individuals

The word
economics comes
from the Greek
word
Oikonomia
Which means
household
management

The fundamental economic problem

Unlimited Wants
Limited Resources
Which leads to Scarcity

The Meaning Of Scarcity And

Choices At All Levels

Individuals
Government
Firms

What to
produce
?

How
resource
s are
produce
d?

Basic
Econom
ic
Questio
ns

For
whom
resource
s are
produce
d?

Thinking At The Margin

A logical
thinker
would
always
choose the
option
where the
marginal
cost
exceeds
the
marginal

The Shape and Shifts of

the Production Possibilities
Curve.
Assumptions:
1.All Factors Must be Kept Constant.
2.Production of Two Types of goods.
3.Full Employment.
4.Fixed technology.

Production Possibilities
Curve
A simple representation
of the
maximum level of output
that an
when using its

economy can
achieve
Efficiency
resources in full.
Inefficiency
Attainable
Production
Unattainable
Production

Economic Growth
To Increase the Productive Potential.
To Shift Further the Graph of
Production Possibilities Curve.

Economic growth Affects the Shape of

Production Possibilities Curve

Increasing
Opportunity
Cost

Constant
Opportunity
Cost

Relationship
between the
costs and the
number of
units produced
remains the
same

Cost
remains
the
same

Constant Opportunity Cost

-Thank You