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 a PPC and state its four assumptions: two goods, fixed resources, fixed technology, full and efficient use. (Guide: “Assumptions of the model”)
- I can explain how a PPC shows scarcity, trade-offs and opportunity cost. (Guide: “Reading a PPC”)
- I can classify a point as efficient, inefficient or unattainable, and explain what each means. (Guide: Figure 1; Practice Q4)
- I can explain why a typical PPC is bowed outward and when a straight line is a better model. (Guide: “Why the curve bows outward”; Practice Q3, Q7)
Calculation and graphing
- I can calculate the opportunity cost of either good between two points on a PPC table, using changes rather than levels, with units. (Guide: Worked example 1; Practice Q1, Q7)
- I can calculate the constant opportunity cost on a linear PPC from its two intercepts. (Guide: Worked example 2; Practice Q4)
- I can show that moving from inside the curve to the curve has zero opportunity cost. (Guide: Worked example 1(d); Practice Q6)
- I can draw a PPC with both axes labelled with the good and its unit, and plot points from a table. (Practice Q5)
- I can draw an outward shift, an inward shift and a pivot on one axis. (Guide: Figures 2 and 3; Practice Q5)
Reasoning
- I can tell a shift of the PPC from a movement along it or towards it, and give the cause of each. (Guide: “Shifts of the curve versus movements along it”; Practice Q2, Q6)
- I can explain why re-employing idle resources is not economic growth in this model. (Practice Q6)
- I can explain how a technology change in one industry changes the opportunity cost of both goods. (Guide: Worked example 2(c))
All ticked? Move on to Topic 1.4, Comparative Advantage and Trade, or return to the course roadmap.