MOD-1.B—a. Define (using graphs as appropriate) the PPC and related terms. b. Explain (using graphs as appropriate) how the PPC…

a. Define (using graphs as appropriate) the PPC and related terms. b. Explain (using graphs as appropriate) how the PPC illustrates opportunity costs, tradeoffs, inefficiency, efficiency, and economic growth or contraction under various conditions. c. Calculate (using data from PPCs or tables as appropriate) opportunity cost.

• The PPC is a model used to show the tradeoffs associated with allocating resources.
• The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, underutilized resources, and economic growth or contraction.
• The shape of the PPC depends on whether opportunity costs are constant, increasing, or decreasing.
• The PPC can shift because of changes in factors of production as well as changes in productivity/technology.
• Economic growth results in an outward shift of the PPC.
• Enduring understanding MOD-1: The production possibilities curve (PPC) model is used to demonstrate the full employment level of output and to illustrate changes in full employment.