Graphing Exercise: Production Possibilities Curve

The economizing problem – scarce resources and unlimited wants – highlights the need for society to make choices among available alternatives. The production possibilities curve is a graphical illustration of the options that are available at a given point in time.

Exploration: Production possibilities:  what alternatives are available to society?


The first graph illustrates the amounts of pizza and industrial robots that can be produced with a hypothetical society’s currently available resources and technology. Each point on the curve represents the greatest number of robots that society can produce if it chooses to produce the corresponding quantity of pizza. At any point on the curve, producing more pizzas means fewer robots can be produced. Likewise, producing more robots means less pizza can be produced. The graph shows that, initially, society is choosing to produce 2 units of pizza (200,000 pizzas) and 7 units of industrial robots (7,000 robots). To use the graph, drag the blue triangle on the Pizza axis to the left or right to change the production mix and investigate opportunity costs. Clicking again on the triangle will establish that as a starting point. Click the Reset button to start over.

  1. If society produces 200,000 pizzas (2 units—point “C” on the graph), what is the greatest number of robots that can be produced?
    See answer here
  2. Starting from 2 units of pizza, what is the opportunity cost of the third unit of pizzas?
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  3. What happens to the opportunity cost of pizzas as even more pizzas are produced?
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  4. What happens to the opportunity cost of robots as robot production is increased?
    See answer here