Scarcity, Opportunity Cost and the Production Possibilities Curve

The basic economic problem is one rooted in both the natural world and in human greed. We live in a world of limited resources, but we seem to have unlimited wants. This results in scarcity, which gives rise to the very field of Economics, which deals with how to allocate scarce resources between the competing wants and needs of society.

This lesson will introduce these basic economic concepts, along with the first (and perhaps the most useful) graph an Economics student will learn, the Production Possibilities Curve.

After watching the lesson, download and complete the following practice activity: 1.0 The Production Possibilities Curve

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