1. PRODUCTION POSSIBILITIES
FRONTIER (PPF) AND
ECONOMIC GROWTH

2. What’s going on here? Think economically.
The War

3. What’s going on here? Think economically.
The War

4. Objectives
1.be able to draw and explain a production possibilities
frontier
2.be able to determine opportunity cost from a PPF
3.be able to identify the meaning of the different
locations on a PPF
4.be able to explain the causes of economic growth and
show economic growth on a PPF

5. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40

6. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10

7. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30

8. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20

9. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20 20

10. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20 20
30

11. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20 20
30 10

12. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20 20
30 10
40

13. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships Cars
0 40
10 30
20 20
30 10
40 0

14. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40
0 40 30
10 30 20
20 20 10
30 10
40 0 0 10 20 30 40 Cars

15. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40
0 40 30
10 30 20
20 20 10
30 10
40 0 0 10 20 30 •
40 Cars

16. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40
0 40 30
10 30 20
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars

17. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40
0 40 30
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars

18. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars

19. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars

20. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars

21. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars
What’s the opportunity cost of going from producing 10 cars to 20 cars?

22. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars
What’s the opportunity cost of going from producing 10 cars to 20 cars?
A. 10 ships. This is a straight-line PPF because the opportunity costs are
constant

23. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars
What’s the opportunity cost of going from producing 10 cars to 20 cars?
A. 10 ships. This is a straight-line PPF because the opportunity costs are
constant

24. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars
What’s the opportunity cost of going from producing 10 cars to 20 cars?
A. 10 ships. This is a straight-line PPF because the opportunity costs are
constant

25. Be able to draw and explain a PPF
Given the resources available at this point in
time, these are the combinations of goods we
can produce
Ships
Ships Cars 40 •
0 40 30 •
10 30 20 •
20 20 10 •
30 10
40 0 0 10 20 30 •
40 Cars
What’s the opportunity cost of going from producing 10 cars to 20 cars?
A. 10 ships. This is a straight-line PPF because the opportunity costs are
constant

26. Be able to draw and explain a PPF
Books DVDs
100 0
75 10
40 20
0 30

27. Be able to draw and explain a PPF
Books
Books DVDs 100
75
100 0
75 10 40
40 20
0 30
0 10 20 30 DVDs

28. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75
100 0
75 10 40
40 20
0 30
0 10 20 30 DVDs

29. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40
40 20
0 30
0 10 20 30 DVDs

30. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20 30 DVDs

31. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs

32. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs

33. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs?

34. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books

35. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books

36. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books

37. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books

38. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books
What’s the opportunity cost of producing the next 10 DVDs?

39. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books
What’s the opportunity cost of producing the next 10 DVDs? 35 books

40. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books
What’s the opportunity cost of producing the next 10 DVDs? 35 books

41. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books
What’s the opportunity cost of producing the next 10 DVDs? 35 books

42. Be able to draw and explain a PPF
Books
Books DVDs 100
•
75 •
100 0
75 10 40 •
40 20
0 30
0 10 20
•
30 DVDs
What’s the opportunity cost of producing the first 10 DVDs? 25 books
What’s the opportunity cost of producing the next 10 DVDs? 35 books

43. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 ipads

44. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 ipads

45. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 ipads

46. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 What is the opportunity cost of going
ipads
from point B to A?

47. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 What is the opportunity cost of going
ipads
from point B to A?
What does it mean to be at point B vs. A?

48. What is the opportunity cost of going
ipods
from point C to A?
250
• a. 75 ipods
A b. 65 ipads
175 • c. 100 ipads
B d. 15 ipads
100 • • C
e. 0
0 42 50
•
65 75 What is the opportunity cost of going
ipads
from point B to A?
0
What does it mean to be at point B vs. A?

49. What do different points on the PPF represent?
Good A
•D
•A
•C •B
•E
Good B

50. What do different points on the PPF represent?
A and B = efficient. Full
Good A employment of resources.
Maximizing output
•D
•A
•C •B
•E
Good B

51. What do different points on the PPF represent?
A and B = efficient. Full
Good A employment of resources.
Maximizing output
•D
•A
E and C = inefficient.
Economy not utilizing all
•C •B resources, or not to
their fullest potential.
•E
Good B

52. What do different points on the PPF represent?
A and B = efficient. Full
Good A employment of resources.
Maximizing output
•D
•A
E and C = inefficient.
Economy not utilizing all
•C •B resources, or not to
their fullest potential.
•E
Good B D = not possible under current conditions.

53. In the PPF below, which point do you think best represents the
current US economy? What is your basis for thinking as such?
Good A
NY Times • A •D
Capacity
Utilization •C • B
•E
Good B

54. In the PPF below, which point do you think best represents the
current US economy? What is your basis for thinking as such?
Good A
NY Times • A •D
Capacity
Utilization •C • B
•E
Good B
How can you apply the PPF model and concept to our government?
To your life?

55. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?

56. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
Punctuate Your
Thoughts
+ Agree/an answer to
the above question
- Disagree/Issue with
? Question you have
! Interesting/Surprising

57. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with
? Question you have
! Interesting/Surprising

58. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with
? Question you have
Property Rights
! Interesting/Surprising

59. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with
? Question you have
Property Rights
! Interesting/Surprising Effective and
responsible
government

60. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your Technology
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with
? Question you have
Property Rights
! Interesting/Surprising Effective and
responsible
government

61. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your Technology
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with Education
? Question you have
Property Rights
! Interesting/Surprising Effective and
responsible
government

62. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your Technology
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with Education
? Question you have
Property Rights
! Interesting/Surprising Effective and
responsible More land and labor
government

63. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Punctuate Your Technology
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with Education
More capital -
? Question you have business investment
Property Rights
! Interesting/Surprising Effective and
responsible More land and labor
government

64. Why has Asia been Successful while Africa has fallen further
behind?
Predict: What will the article say, mention, discuss?
LR Economic Growth
Free
Punctuate Your Technology Trade
Thoughts
+ Agree/an answer to
the above question Conditions Causes
- Disagree/Issue with Education
More capital -
? Question you have business investment
Property Rights
! Interesting/Surprising Effective and
responsible More land and labor
government

65. How do you show economic growth with a PPF?
Trucks Trucks
Computers Computers
being able to make more being able to make more
of all goods computers than before only

66. How do you show economic growth with a PPF?
Trucks Trucks
Computers Computers
being able to make more being able to make more
of all goods computers than before only

67. How do you show economic growth with a PPF?
Trucks Trucks
Computers Computers
being able to make more being able to make more
of all goods computers than before only

68. Objectives
1.be able to draw and explain a production possibilities
frontier
2.be able to determine opportunity cost from a PPF
3.be able to analyze the meaning of the different
locations on a PPF
4.be able to explain the causes of economic growth and
how to show economic growth on a PPF