Monthly Archive: January 2016

Economics: Production Possibility Frontier

Now that we have learned about the definition of economics, and about the differences between macroeconomics and microeconomics, we can now talk about the Production Possibility Frontier. It sounds complicated, but we will break it down in a bit. First, let us show how it is related to economics. To review, economics is the efficient allocation of scarce resources. Remember, because these resources are scarce, or limited, whoever practices economics cannot simply do whatever he wants, or buy everything he wants. Instead, he should choose where he wants the resources to go—in other words, allocate them to different things. Following...