The A-Z of Economics

Table of Contents

1. The A-Z of Economics - introduction
2. Economics glossary
3. Fundamental economic concepts
   1. Economics as a social science
   2. Economics and supermodels
   3. Ceteris-paribus
   4. Positive and normative economics
   5. Are people rational?
   6. Scarcity
   7. What? How? For whom?
   8. Choice and opportunity cost
   9. Production possibility curves
   10. PlotIT - Build a production possibility curve
   11. Intervention
   12. Sustainability
   13. Economic efficiency and equity
   14. Economic growth and development
4. Key terms
5. Famous economists
6. Branches of economics
7. International Organisations
8. Games and activities
9. IB Assessment
10. Print View

PlotIT - Build a production possibility curve

The table below shows the production possibilities for country X. Calculate the figures in the third row of the table by calculating the opportunity cost of producing each extra unit of clothing. Jot these down on a piece of paper. You can check your answer if you want to.

Now use the first two rows of the table to plot the production possibility curve on the following diagram. Do this by clicking on each point in turn. Thus for the first point, click the mouse on the point that corresponds to 0 units of clothing and 24 units of food. Then click on the point corresponding to 1 unit of clothing and 23 units of food, and so on.

You may like to check your answer to see how your diagram compares.

Now assume that improvements in technology increase food production by 25 per cent. Fill in the new possibilities for food production and calculate the new opportunity costs of producing extra units of clothing. Jot these down on a piece of paper. You can check your answer if you want to.

On the diagram above, plot the new production possibility curve by clicking on each of the points corresponding to rows 1 and 4 of the above table in turn as before. You may like to check your answer to see how your diagram compares.

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