In this module, students learn about the production possibilities curve, a graphic representation of output combinations that can be produced given an economy’s available resources and technology.
With their new-found wealth, Andy and Jack have acquired islands, Los Andeles and Jackramento, giving Jack the perfect opportunity to teach Jack about production possibilities, opportunity cost, and the efficiencies of trade according to comparative advantage.
Content Standard 1: Scarcity
Grade 4 Benchmark
5. The opportunity cost of a activity is the value of the best alternatives that would have been chosen instead. It includes what would have been done with the money spent and the time and other resources used in undertaking the activity.
Standard 5: Trade
Grade 8 Benchmark
7. Voluntary exchange among people or organizations gives people a broader range of choices in buying goods and services.
Standard 6: Specialization
Grade 4 Benchmark
1. Economic specialization occurs when people concentrate their production on fewer varieties of goods and services than they consume.
Grade 8 Benchmark
2. Like trade among individuals within one country, international trade promotes specialization and division of labor and increases the productivity of labor, output and consumption.
Grade 12 Benchmark
1. Individuals and nations have a comparative advantage in the production of goods or services if they can produce a product at a lower opportunity cost than other individuals or nations.