IB DP Microeconomics · SL & HL
PPF & opportunity cost
Drag the production point — inside, onto, and past the frontier — and watch what scarcity actually means. Then shift the whole frontier out and see what growth buys.
- This point is
- inefficient
- Opportunity cost of one more consumer good
- 0.46
Inside the frontier: resources are unemployed or misallocated — both goods could increase without giving anything up.
The bowed-out shape is the point: resources aren't equally suited to both goods, so each extra consumer good costs more capital goods than the last.