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Actions for Discussion Activity #1

The Production Possibilities Model/Frontier(PPF) illustrates the concepts of Scarcity, Choice(trade-off) and Opportunity Cost(value forgone); under the assumptions of :fixed (limited)resources, fixed technology, efficient production and full employment, and (two) goods being produced in an economy.

Consider a hypothetical PPF for any two goods of your choice . Indicate the combinations of the two goods( in units ) -along the PPF, inside or outside the PPF -that best illustrate each of the above concepts. Explain why there is no opportunity cost involved if you moved from a combination inside the PPF to a combination along the PPF.

Reference no: EM131799221

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