Economics (AS)·Production possibility curves · NSSCAS 1.1b
The production possibility curve
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Last lesson we defined scarcity, choice and opportunity cost in words. Now we give those ideas a picture: the production possibility curve. This single diagram shows what an economy can and cannot produce, why every point on it is a choice, why moving along it always has an opportunity cost, and why the cost of switching often rises as we go. We then use it to show economic growth as an outward shift, and to see the trade-off between producing for today and investing for tomorrow.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Economics (AS) 1.1b):
- Illustrate the production possibility frontier (opportunity cost curve)
- Explain decision making at the boundary, short run and long run
- Explain the shape and shifts of the production possibility frontier
- Explain constant and increasing opportunity cost
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Miss Hilma and Mike talk through the whole topic — with the figure and working drawn live.