Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can define opportunity cost as the next best alternative given up, and explain how scarcity creates tradeoffs. (Guide: “Opportunity cost: every choice gives something up”)
- I can define a PPC and state the assumptions behind it. (Guide: “What the PPC model assumes”)
- I can explain what points on, inside and outside a PPC mean for efficiency and unemployed resources. (Guide: Worked example 1(d); Practice Q1, Q7(c))
- I can tell a movement along the PPC apart from a shift of the curve. (Guide: “Our fictional economy: Valdoria”; Practice Q3)
Calculation
- I can calculate total and per-unit opportunity cost from a PPC table, with units. (Guide: Worked example 1; Practice Q2, Q7(a))
- I can find opportunity costs from a straight-line PPC and swap them to the other good. (Guide: Worked example 2; Practice Q5(a))
- I can test whether a combination is attainable by comparing it with the maximum on the PPC. (Practice Q5(b), Q7(c))
- I can explain why moving from a point inside the PPC to the curve has no opportunity cost. (Guide: Worked example 1 “Check”; Practice Q5(c))
Graphing and reasoning
- I can draw a correctly labelled PPC with the right shape for constant, increasing or decreasing opportunity cost, and explain each shape. (Guide: “Why the shape depends on opportunity cost”; Practice Q4, Q6(a), Q7(b), Q7(d))
- I can show and explain an outward shift (growth) and an inward shift (contraction), naming changes in resources or technology that cause them. (Guide: “Shifts of the PPC: growth and contraction”; Practice Q3, Q6(d))
- I can show a pivot when technology improves only one good, and say how the opportunity costs change. (Guide: Worked example 2; Practice Q6(e))
- I can explain how producing more capital goods today affects the PPC in the future. (Guide: “Shifts of the PPC: growth and contraction”; Practice Q6(c)–(d))
All ticked? Move on to Topic 1.3, Comparative Advantage and Gains from Trade, or return to the course roadmap.