Explain the concept of opportunity cost and the nature of trade-offs in the allocation of resources using production possibility curve analysis.
and if you’ve followed closely with the posts and stuck to reading and thinking daily, you would have achieved it.
Specifically, you should now be able to do the following:
- Explain opportunity cost with the use of examples.
- Draw the Production Possibilities Curve (PPC)
- Extract key information from the PPC.
- Explain the concept of productive efficiency using the PPC.
- Elucidate assumptions behind the PPC.
Apply concepts such as opportunity cost, trade-offs, and the PPC model to understand and analyse economic issues in the real world.
Well the last one is a bit tricky, so don’t worry if you haven’t got it. Here are 3 quick tips for how you can further master the content:
- If you haven’t already, go think about the further questions at the end of every post. They are meant to help you get a deep understanding of the material, and are NOT in any way meant to be optional. They add rigour to the simple posts and are guaranteed to enhance your learning if you spend some time thinking about them. Google is often a good place to start.
Think about how you can apply these stuff to everyday life. Start small. Look around you and see which of these concepts you can use to explain phenomenon you observe.
Read more — especially on business and microeconomics type material. The Economist’s Business and Finance section is an excellent place to start. it might be a bit difficult, but remember that you will never grow if you only read the easy stuff. Then think about how these ideas can be applied to understand those events. This will prepare you greatly for the A Levels.
Next week’s Objective
Apply the basic concept of comparative advantage in everyday living and explain its benefits in terms of specialisation, division of labour, and exchange.
And a final note: Please do share this site or 5 MOL! series with your friends if you think it’s valuable. It will mean a lot to us.
Thanks for reading and till next time, dream economics.