{"id":5823,"date":"2016-07-19T18:00:50","date_gmt":"2016-07-19T18:00:50","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/macroeconomics\/?post_type=chapter&p=5823"},"modified":"2016-07-19T18:00:50","modified_gmt":"2016-07-19T18:00:50","slug":"outcome-the-production-possibilities-frontier","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-hccc-macroeconomics\/chapter\/outcome-the-production-possibilities-frontier\/","title":{"raw":"Outcome: The Production Possibilities Frontier","rendered":"Outcome: The Production Possibilities Frontier"},"content":{"raw":"

What you'll learn to do: illustrate society\u2019s trade-offs by using a\u00a0production possibilities frontier (or curve)<\/h2>\nNow that we understand positive and normative statements, let's return to how individuals\u00a0and societies make choices. Here we're going to focus on production and the tradeoffs involved in producing one thing versus another.\n\nFirst we'll consider the example of a student, whose limited time means that doing\u00a0one thing necessitates doing less of another thing. You'll learn how to show these choices and consequences graphically. A single individual making choices between two different production options is the simplest scenario,\u00a0so it's important to understand this case before moving on to more complex ones.\n\nNext, we'll explore the idea of production options on a much bigger scale\u2014on the level of what an entire society<\/span> can produce\u2014and use what's known as the\u00a0production possibilities curve<\/strong> (also called the production possibilities frontier<\/strong>) to see\u00a0the different choices.\n\nThe production possibilities curve is a diagram that shows the possible\u00a0combinations of two products or services that could potentially be produced within a society. For example, a country could choose to spend all of its income on defense or on education. The curve represents points where the country could maximize the use of its resources by choosing to produce a combination of defense and education, devoting all its resources to just defense, or devoting them just to education. In this section you'll gain some first-hand experience with economic models and graphing tools, too.\n\nThe specific things you\u2019ll learn in this section include the following:\n