1.3.5 Practice: Analyzing a Production Possibilities Curve Economics and Personal Finance Sem 1 Name: Date: Practice Section 1: Creating a Production Possibilities Curve Complete items 1 through 5. Work through the pages of this activity if you need to review production possibilities curves. Feel free to jump back to the previous activities in the lesson if you need to review major concepts. 1. Imagine products you might create in a given amount of time: poems, baked goods, online videos, movie reviews, video game mods, scarves, drawings, or anything else you can picture yourself making as part of a small, one-person business. Choose and describe two such products. They will be product 1 and product 2. (1 point) 1. Making shirts 2. Making pants 2. What are the inputs - the scarce resources - required to create your two products? (1 point) Fabric, sewing equipment, labor hours, and a printing machine are the inputs for product 1.Fabric, time, and sewing equipment are the inputs for product 2. 3. Come up with a set work period, such as one day or one week. State how many of product 1 you can make in that period if you create the product type exclusively. Then state how many of product 2 you can make in the same period if you work on
that type of product exclusively. (1 point) 140 shirts may be produced in a single week, but only 100 pairs of pants. 4. Fill out the table. Under the first column, list your two products. Then refer to question 3 to fill out columns A and E. Under column A, write down how many of product 2 you can create if you make zero of product 1. Under column E, write down how many of product 1 you can create if you make zero of product 2. Then, in columns B through D, do your best to split the difference. Under column B, for example, if you make slightly fewer of product 1, how many of product 2 can you create in the same period? Estimate if needed. (2 points) A B C D E Product 1: 0 40 70 100 140 Product 2: 100 70 50 30 0 5. Now create your production possibilities curve, based on the information in the table you just filled out. Use the chart shown as a model, but note that your numbers and your curve will be different. Depending on the numbers you wrote in your table, your "curve" may even look more like a slant. (2 points) each unit represents 10 products
Point A 80 Point B 60 Point C Socks 40 Point D 20 0 1 2 Blankets Point E 3 4 Section 2: Analyzing a Production Possibilities Curve 1. In what way does your production possibilities curve demonstrate the concept of scarcity? Support your answer with examples from your imaginary business. (2 points) Scarcity is shown in the space outside the frontier. At the company's current level of production, any point outside