MICROECONOMICS

08 PRESENTATION
THE PRODUCTION ALTERNATIVES CHART
 SMART TABLE

AB BC CD DE

Opportunity cost 3 3 9 6
of cars 2000 1000 2000 1000

Opportunity cost
2000 1000 2000 1000
of guided
missiles 3 3 9 6
 THE ECONOMY AT POINT C

CONCLUSION
A B C D
9
B C D E The opportunity cost of producing cars:
2000

Opportuni 3 3 9 6
The cost of one-million more cars:
ty cost of 9
cars 2000 1000 2000 1000 106 x = 4500 guided missiles.
2000
Opportuni 1000
ty cost of 2000 1000 2000 1000 The opportunity cost of guided missiles :
L 3
guided 3 3 9 6
missiles The cost of one-million more GM:
1000
103 x  333 333 guided missiles.
3
 +) Point H is an infeasible point.
+) Economy growth-though improved
C&D
technology, increase in inputs, and/or
better inputs must be archived to attain H.

+) Point G represents an inefficient state of

the economy.
+) Point G indicate unemployment and/or
inefficient resource in the economy.
 White Tablet
INEFFECTIENCY POINT H
POINT G

FEATURES
Q 20 tons of wheat and
10 000 set of cloths

CONCLUSION
# This economy can’t
because the point
outside the PPF curve.
OPPORTUNIY COST

A B C D

Opportuni
-ty cost of 4 3 1 1
producing 5 5 3 9
wheat
Opportuni
-ty cost of 5 5 3 9
producing 4 3 1 1
cloths