Production Possibilities, Opportunity Cost, and

Economic Growth

CHAPTER

2

2Tucker Economics for Today, 4e • Ch 2 Production Possibilities, Opportunity Cost, and Economic Growth© 2005 Thomson/South-Western

EXHIBIT 1 THE LINKS BETWEEN SCARCITY, CHOICE, AND OPPORTUNITY COST

3Tucker Economics for Today, 4e • Ch 2 Production Possibilities, Opportunity Cost, and Economic Growth© 2005 Thomson/South-Western

EXHIBIT 2 THE PRODUCTION POSSIBILITIES CURVE FOR MILITARY GOODS AND CONSUMER GOODS

4Tucker Economics for Today, 4e • Ch 2 Production Possibilities, Opportunity Cost, and Economic Growth© 2005 Thomson/South-Western

EXHIBIT 3 THE LAW OF INCREASING OPPORTUNITY COSTS

5Tucker Economics for Today, 4e • Ch 2 Production Possibilities, Opportunity Cost, and Economic Growth© 2005 Thomson/South-Western

EXHIBIT 4 AN OUTWARD SHIFT OF THE PRODUCTION POSSIBILITIES CURVE FOR COMPUTERS AND PIZZAS

6Tucker Economics for Today, 4e • Ch 2 Production Possibilities, Opportunity Cost, and Economic Growth© 2005 Thomson/South-Western

EXHIBIT 5 ALPHA’S AND BETA’S PRESENT AND FUTURE PRODUCTION POSSIBILITIES CURVES