Question

Illustrate three of the following concepts using properly drawn and labeled production possibilities frontier graphs. Use a separate ppf graph for each concept you select.

1. scarcity and trade-offs
2. unemployment
3. opportunity cost
4. economic growth

Answer 1

Production possibility curve is combination of all those goods which can be produced by efficient utilization of resources.

Scarcity is the basic economic problem which arises from limited resources and limitless wants which in turn gives rise to make decision about which good to choose , basically the trade off between two goods.

Graph below depicts that with efficient utilization of the good either (X1 and Y1) can be produced (X2 and Y2) can be produced where X2<X1 & Y2>Y1 which means to produce more of one good some quantity of other good has to sacrificed.

2

Unemployment of resources is inefficient utilization of resources. Any point inside PPC show inefficient utilization of resources.

See the graph below, point C shows unemployment

Economic growth is basically the output growth (more production of both the goods) which is possible through technology upgradation.

A. 2

Any point outside PPF shows economic growth ,point F shows economic growth.

2 oad X 2

ALL THE BEST :))