Possibility Curve Exercise 1-2

The production of goods and services is one of the factors analyzed by the economics, which uses economic models to explain the various combinations of the output that can be produces from the available resources and technology improvement. This model of the production is represented by production possibilities curve. Figures(1.1-1.4) illustrate the production possibilities curve models.

As we can see, The production possibilities of two different goods per certain period is shown in Fig. 1.1, while Fig. 1.2 illustrate the Law of increasing costs where the production level of any item increases, its per unit cost of production rises. In figures (1.3 & 1.4) we can see the effect of technological change on the production possibilities, and also the different growth rates for two economics and how the production possibilities curve reflects the growth of each economy.

Economics is sometimes called the Science of choice, as “factors of production” in any economy are seen as scarce by economists, in other words, no economy has sufficient resources to produce all the goods and services, and in face of people’s unlimited demands and society’s limited resources, choice becomes a forced necessity, the choice of producing a particular item rather than the other can be determined and the decision can be made depending on the production possibilities, its always involved a trade-off with the next best alternative that is scarified.

There are many examples in our life of scarcity and choices, for myself for example, I have a degree in computer and systems engineering and in the other hand I have a long and good experience in finance and administration, I landed in Canada last June and after investigations, simple survey to the nature of the life in Canada, how do people make their living, the markets, the property prices, employment’s conditions, I made a decision to study Business and accounts. Scarcity in studying and scientific degree in accounts in spite of all the experience I have, made me chose to study, and by returning to school, the opportunity cost for me will be hours used to be spend with my family in addition to 3 workings hours which decreases my income.