Economics Lesson 9
See overhead transparency 14-3
Production frontier
Public Goods
-Allocation
Choosing which wants/needs are met
-you can’t do it all you have to make choices
-Scarcity- you only have so much stuff you have to allocate what you’ll spend your money on
You have $400 for a trip for 4 days How will you spend it?
-split rooms with someone
-go to a resturant (salad bar) for lunch (its cheaper)
dinner $1.50 or $2.00 more and eat less at night
1 tak of gas = 400 miles
- Production Possibilities Curve
- If you cant do it all you have to make choices
- Production possibilities curve, private goods and public
goods
Public (guns) private (butter)
-(A) making as much butter and no guns
-(B) making as much guns and no butter
In WWII more guns and than butter (D)
If we wanted some of each make ½ and ½ (F)
More butter than guns (C)
Curve A/B
-Bring in better machines & more people to push production curve out incereasing our ability to
do both
more efficiency = to capacity or better curve
-production down = less of everything
- We can only make100% of one or of the
other or some other percentage of each that equals 100%