Scarcity arises because resources are finite, while human desires and needs are virtually infinite. This imbalance forces individuals and societies to make choices about allocating resources.
The PPC shows the maximum output combinations of two goods that an economy can achieve, given its available resources and technology. Points on the curve represent efficient production, while points inside represent underutilization.
Operating on the PPC means the economy is using all its resources efficiently. To increase production of one good, the economy must reduce the production of another good, reflecting opportunity cost.
Opportunity cost is the value of the next best alternative forgone. For attending college full-time, it includes both direct costs like tuition and the income lost by not working full-time.
An outward shift in the PPC indicates economic growth, often resulting from factors like technological advancements or increases in resources, which enable higher productivity.
