Lesson Notes By Weeks and Term - Senior Secondary 2

The Production Possibility Curve (PPC)

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  4. The Production Possibility Curve (PPC)

Term: 1st Term

Week: 7

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Economics

Topic:-       The Production Possibility Curve(PPC)

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Explain the meaning of production possibility curve
  2. Plot the PPC from a given data

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on elasticity of supply

Students pay attention

STEP 2

EXPLANATION

She explains the meaning of production possibility curve.

Students pay attention and participates

STEP 3

DEMONSTRATION

She states the guidelines for plotting a production possibility curve and actually plots some

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

PRODUCTION POSSIBILITY CURVE (PPC)

This is a curve or graph which shows the various combination of two goods that can be produced with available resources, given the level of technology.

This is also known as Production Possibility Bound (PPB)) or Production Transformation Curve (PTC)

Production Possibilities Frontier – the line on a production possibilities graph that shows the maximum possible output

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, the alternative that is given up because of a decision – the opportunity cost

Sunk Cost – a cost that cannot be avoided because they have already been incurred

Growth – an economy wants to move the production possibilities curve to the right. It can do so only with growth.

Reasons for Growth

  1. Accumulation of capital
  2. Technological advances
  3. Increase in population – immigrants, birth rates increase
  4. Available land or improvements to land

 

The idea behind the production possibility curve is that in order to produce a particular commodity, the production of another commodity has to be sacrificed.

For example, the production possibility curves for the production of cattle and motor vehicles in South Africa.

Production Possibility Table for The Production of Cattle and Motor vehicles by South Africa

Possible combination           

head of cattle 

no of motor vehicles

A

200

0

B

170

30

C

100

70

D

80

130

E

40

150

F

0

180

 

The table shows the alternative open to South Africa to substitute the production of cattle for vehicle on a monthly basis, assuming a given state of technology and a given total of resources.

INTERPRETATION OR POINTS TO NOT FROM THE GRAPH

  1. Points A to F on the graph indicate efficient use of resources
  2. At points O and P (outside the curve), production is not feasible. Production of these points is not feasible due to the limited resources and technology.
  3. At point K and L (inside the curve), production is feasible. It represents where resources are not efficiently utilized.
  4. The downward slope of the PPC indicate that there is an opportunity cost of producing more of one type of commodity and less of the other due to limited resources and technical know how


RELATIONSHIP BETWEEN PPC AND OPPORTUNITY COST

 

The negative slope of the PPC illustrates that there is an opportunity cost

involved in the production of more of a commodity as less of the other will

be produced due to limited resources and technical know-how. This cost is

measured in terms of the quantity of the other commodity forgone or

sacrificed

 

EVALUATION:    1. Define Production Possibility Cost

  1. Jackie land is known for the production of Cupcakes           and Robots. The following is a PPT for Jackie land: 

 

A

B

C

D

E

F

G

H

I

J

Cupcakes:

0

2

6

10

14

18

22

26

28

30

Robots:

30

28

26

22

18

14

10

6

2

0

 

  1. Draw and label (each axis and each point). Put cupcakes on the Y
  2. Indicate on the graph with Point K where inefficient
  3. Indicate on graph with Point L where unattainable is

Note that points A – J indicate efficient uses of resources.

 

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively