Transcript File

Chapter 1
Section 3
Slide 1
• United States entered World War two in 1941
and faced an urgent task to create and
produce weapons.
• Govt. switched the output of factories, farms,
and mines from consumer needs to the
production of military products.
Slide 2
• In 1994 the farmers in the United States grew
close to two million tons of watermelons.
• Economists often use graphs to analyze the
trade-offs and choices that people make.
Slide 3
• Graphs let us see how one value relates to
another.
• The axes of the graphs show categories of
goods and services, such as farm goods and
factory goods.
• Can also display any pair of specific goods or
services.
Slide 4
• You can draw a graph to see which product
will make the most in the long run.
• With graphs you can see which product you
can focus on and make it as good as possible.
• If you want to produce two products but only
have the workers and space for one, then you
have to get rid of one of those products.
Slide 5
• Production possibility graphs can show how
efficient an economy is, whether the economy
has grown or shrunk.
• A production possibility frontier can represent
an economies level of efficiency or level of
maximum production.
Slide 6
• Underutilization can be very bad for an
economy, that means people aren't buying the
products that are on the self.
• The Production Possibility Curve can reflect
the countries current production possibility as
if the countries resources were frozen in time.
Slide 7
• In real time the quantity of a countries
resources are constantly changing all the time.
• If the quality of the land, labor, or capital
changes, then the production possibilities
curve will change.
• If immigrants pour in the country labor will go
up so production increases.
Slide 8
• Also new inventions can also change existing
technology and allow workers to produce
more goods and services at lower costs.
• When an economy grows, economists say that
the entire production possibilities curve shifts
to the right.
Slide 9
• When a countries production capacity
decreases, the curve shifts to the left.
• For example when a country goes to war and
loses part of its land as a result.
• It also depends on the average age of the
people that live in the country.
Slide 10
• During World war two, consumer goods were
in short supply as the nation shifted resources
to increase production on planes, ships,
artillery, and ammunition.
• Ration coupons were used to make sure
consumers got a share of the goods.
Slide 11
• If a company makes two different goods then
they will take more room to make that good
faster and make more of it.
• They will take more space and make the
product that is going to sell better and then
take the other product and only make alittle
of it.
Slide 12
• North America and Europe are the heaviest
computer-using regions of the world.
• The law of increasing costs states that as
production shifts from one item to another,
one item will increase and the other will
decrease.
Slide 13
• IBM was the first company to substitute
copper for aluminum in making
semiconductors, a vital breakthrough for
manufacturing faster and more-powerful
computer chips.
• This made this company jump start into
making faster computers
Slide 14
• If a company is reaching its production
possibilities goal easily then the next year they
might move it higher so they can push
themselves to make more products and
money.
• If a company does not increase in production
then they will most likely go out of business in
the future.
Slide 15
• A company should always keep a good look on
their efficiency to see if they need to find
better ways to make and sell a product.
• How fast you can make the product can also
effect if you stay in business.
Slide 16
• Production possibilities graph-a graph that
shows alternative ways to use an economy’s
resources
• Production possibilities frontier – the line on a
production possibilities graph that shows the
maximum possible output
Slide 17
• Efficiency- using resources in such a way as to
maximize the production of goods and
services
• Underutilization- using fewer resources than
an economy is capable of using
• Cost- to an economist, cost is the alternative
that is given up because of a decision
Slide 18
• Law of increasing costs- as we shift
factors of production from making one
good or service to another, the cost of
producing the second item increases
• Speaking economically, note that cost is
not necessarily money
Slide 15
• If an economy is growing an economist might
say, “The entire production possibilities curve
has shifted to the right.”
• Concerning opportunity cost an economist
might say that “choosing is refusing”
Question 1
• What is a graph that shows alternative ways to
use an economys resources ?
Question 2
• What is known as the line on a production
possibilities graph that shows the maximum
possible output?
Question 3
• What is using in such a way as to maximize the
production of goods and services?
Question 4
• What is it called when an economy uses fewer
resources than it is capable of ?
Question 5
• What is the alternative that is given up instead
of a decision?
Question 6
• When we shift factors of production from
making one good or service to another, the
cost of producing the second item increases
which is called?
Question 7
• How is Underutilization depicted on a
production possibilities frontier?
Question 8
• How does a production possibilities graph
illustrate how efficient an economy is?
Question 9
• How does a production possibilities graph
illustrate opportunity cost?
Question 10
• What does a country’s resources include?