NARRATIVE

REPORT

Group #3
Carlo Redoblado
John Paul Dela Cruz
Bj Aries Roque
Noime Salvatierra
Andrea Medina
John Mark Castillon
 Table of Content

Opportunity Cost …………………………………… page 3

Law of Increasing Costs …………………………. Page 4

Production possibilities ………………………….. Page 5

Comparative advantage ………………………… page 6

Opportunity Cost (John Paul Dela Cruz)

Opportunity cost represents the potential

benefits that a business, an investor, or an
individual consumer misses out on when
choosing one alternative over another. While
opportunity costs can't be predicted with total
certainty, taking them into consideration can
lead to better decision making.
Law of Increasing Costs (Carlo Redoblado &
Noime Salvatierra)
In economics, the law of increasing costs is a
principle that states that to produce an
increasing amount of a good a supplier must
give up greater and greater amounts of another
good. The best way to look at this is to review
an example of an economy that only produces
two things - cars and oranges.
The law of increasing cost is an economic
principle that states that when a supplier
increases the production of a good, the
opportunity cost of producing additional goods
also increases.
Production possibilities (Andrea Medina &
John Mark Castillon)

The production possibility frontier (PPF) is a

curve on a graph that illustrates the possible
quantities that can be produced of two products
if both depend upon the same finite resource for
their manufacture. The PPF is also referred to as
the production possibility curve.
PPF also plays a crucial role in economics. For
example, it can demonstrate that a nation's
economy has reached the highest level of
efficiency possible.
Comparative advantage ( BJ Aries Roque)
The producers has a comparative advantage
over other in the production of goods and
services if he or she can produce that product at
lower opportunity cost. It is used to explain why
companies, countries, or individuals can benefit
from trade.When used to describe international
trade, comparative advantage refers to the
products that a country can produce more
cheaply or easily than other countries. While
this usually illustrates the benefits of trade,
some contemporary economists now
acknowledge that focusing only on comparative
advantages can result in the exploitation and
depletion of the country's resources.