Have you been to a frontier lately? Whether you realize it or not, the economy has a frontier—it has an outer limit of economic production. In the eighth episode of the Economic Lowdown Video Series, economic education specialist Scott Wolla explains how the production possibilities frontier (PPF) illustrates some very important economic concepts.
This segment of The Production Possibilities Frontier uses the fictional economy of Econ Isle to discuss how limited resources result in a scarcity problem for the economy. Econ Isle’s production possibilities are graphed to show its frontier, and then used to discuss the opportunity costs of its production and consumption decisions.
Content Standard 1: Scarcity
Grade 4 Benchmarks
6. Productive resources are the natural resources, human resources, and capital goods available to make goods and services.
8. Human resources are the quantity and quality of human effort directed toward producing goods and services.
9. Capital goods are goods that are produced and used to make other goods and services.
Grade 8 Benchmarks
1. Scarcity is the condition of not being able to have all of the goods and services that one wants. It exists because human wants for goods and services exceed the quantity of goods and services that can be produced using all available resources. Scarcity is experienced by individuals, governments, and societies.
Grade 12 Benchmarks
1. Choices made by individuals, firms, or government officials are constrained by the resources to which they have access.
