TOPIC 2

ECONOMIC CONCEPT
IN BUILT
ENVIRONMENT
WHAT SHOULD YOU LEARN IN TOPIC 2

ECONOMIC CONCEPT Production Possibility Curve Applying the concept in built

[PPC] environment
What are the key economic concept How to explain PPC
 Students’ Learning Outcomes
◈ Students are expected to:
◈ Be able to explain the economic concept
◈ Explain the PPC and how does the PPC is use to explain the economic
concept
◈ Applying the concept by providing examples related to the built environment
sector.
Basic Economic Concept

What is
Ends Scarcity
scarcity?

What is Opportunity
Choices costs
choices?
 Production Possibility Curve [PPC]

◈ “Used to explain the basic economic concepts”

◈ “The PPC shows the various possible combinations of goods and services
produced within a specific time with given resources”
Production Possibility Curve [PPC]

What do point A&B

indicate?

Can company
produce at point D?

Can company
produce at point C?
Calculating Opportunity Costs

◈ Refer to the pre-recorded video on the calculation of OC

Factors influencing the shift of PPC
Economic Growth
• When a country enjoys economic growth, the PPC move outwards
• With economic growth the production capability of a country increases, and there is an expansion of FOP
[land, labour, capital, entrepreneurship]
• When a country is struck by natural disaster, the economic growth decline

Technological
changes
• Advance in technology will also increase the production capability of a country. E.g. if there is a new
innovation, application of new technology and effiecient production.

Population
• An increase in population will influence the PPC curve to shift outwards. Large population will result in
increase in production.
 Tutorial 2:
Calculating the OC
◈ Calculate the OC for one more semi-detached house (how many of detached houses that
we need to foregone in order to add one more semi-detached house?)

Combinations Detached Houses Semi-detached Opportunity Cost

houses
A 30 0
B 29 2
C 26 5
D 20 9
E 11 11
F 12 12
G 0 30