# Production possibilities and opportunity costs

##### Intros
###### Lessons
1. Production Possibilities and Opportunity Costs Overview:
2. Production Possibilities Frontier
• All possible choices of production
• Limits to the production of two goods
• Key Ideas
• Production efficiency and product inefficient
3. Opportunity Cost
• Something that must be given up to acquire something else
• Opportunity Cost as a Ratio
• Examples
##### Examples
###### Lessons
1. Understanding Production Possibilities Frontier
Suppose a business can produce pops and bananas. The business' production possibilities are as follows
 Pops (per day) Bananas (per day) 18 0 15 1 11 2 6 3 0 4
2. If the business can produce 11 pops per day, then how much bananas does it need to produce per day to achieve production efficiency?
3. What production of pops and bananas would be considered product inefficient?
4. If the business is currently producing 3 bananas per day and 6 pops per day, then what is the trade off to attain another banana?
2. Suppose a business can produce cars and tires. The business' production possibilities are as follows
 Cars (per day) Tires (per day) 0 34 2 27 4 19 6 10 8 0