Exercise 1-2) Possibility Curve

Production Possibilities

The graphs illustrate based on the assumption of limited resources. If resources are too abundant enough to use unlimitedly, we don’t need to choose considering opportunity costs. However, the scarcity always exists in our society due to the limited resources so when we decide to choose, it is so natural to consider opportunity costs. The graphs of production possibilities are also based on opportunity costs.

Last two semesters, I dropped a few course because my daughter finished her kindergarten earlier than I quit studying. In my case, scarcity was my limited time to take care of my young daughter and my choice was to drop courses which finish after 2:30PM. I considered the cost of the next best alternative, in which I hire a care giver. However, I decided to choose the time with my daughter above money because this moment cannot buy after passing.

When I decided to return to school, I gave up the wage that I can receive for working at company as supervisor. However, I expect that I can be rewarded for my hard work.