Prayer
Current events:
Peter Schiff offers his perspective.
We will continue the material on scarcity: i.e., scarcity and opportunity cost.
http://www.fte.org/teachers/programs/rightstart/curriculum/scarcityandopportunitycost.html
"ADAM and EVE: In the beginning there was a production possibility frontier" is next up on the agenda.
To understand production possibilities, and to draw your own graph on "ADAM and EVE," we can take a look at the textbook, Core Economics, Gerard W. Stone, in particular the section entitled "Production Possibilities," pp. 33-36, up to but not including "Economic Growth," on p. 36.
After examining the textbook, work in a small group, two or three students together, and draw a Production possibilities graph on "ADAM and EVE."
I will circulate to assist as necessary.
As review assistance, consider the post, "Every Graph You Need To Know," to supplement your understanding of the Production Possibilities Curve; and, you can also view:
"A correctly labeled Production Possibilities Curve/Frontier."
HW (you can email the answers to me (gmsmith@shanahan.org).
From Core Economics, Gerard W. Stone, in particular the section entitled "Production Possibilities," pp. 33-36, answer the following questions.
1. Since the Production Possibilities Curve in Figure 2 on p. 34 is linear, what happens to the opportunity cost in terms of jackets as you move from one point to another on the curve?
2. What do all points along the Production Possibilities Curve represent?
3. What economic state is represented by points inside the Production Possibilities Curve?
4. Define Opportunity cost.
5. What does a bowed out Production Possibilities Curve indicate about a country's opportunity cost?
6. In a capitalist economy, what determines resource allocation?
