Daniel van der Valk
In this essay I will be talking and showing what different concepts is and what they look like on the PPC (production opportunity curve). The concepts this paper would explain are: Scarcity, Choice, Opportunity Cost, Unemployment and Economic Growth. The paper would also be categorized in that order. I will state the full meaning and understanding of each concept then will show where it stands on the graph. Scarcity cost, Choice and Opportunity Cost are all closely related and you will find out how in this paper. This paper understands the PPC and how Scarcity, Choice, Opportunity Cost, Unemployment and Economic Growth applies to the graph.
Scarcity cost is what is outside the PPC, it is when people want something more than what their resources can provide for their wants. [Allthink(22 January 2014)] Economic resources are limited and humans wants are infinitive. For an example, scarcity is when someone has R100 but you desire or need R110 worth of goods. Their resources cannot supply the person with enough goods or services he requires.
Choice is closely linked to Opportunity cost. A choice is when a human has to choose which product or service he or she has to pick to buy. On the PPC, if you had R100 to buy a certain amount of chocolates ( costing R5) and coca colas ( R10) then would normally would buy to what your wants desire, for instance, you could choose to buy 8 cokes and 4 chocolates or 3 cokes and 12 chocolates. Choice is what think will be the best use of your money when buying the products your desire or need.
Opportunity Cost is the best alternate. Once we have chosen the best option in spending the money on the products or services needed, the next best alternate which is left out is known as Opportunity Cost, the benefits we could lose in our first alternate could be achieved from the next best alternate ( Opportunity Cost). [Dineshbakshi.(January 2014)]
Unemployment is when the