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  Production Possibilities

Production Possibilities:

The other significant question concerning the fundamental economic problems is: How do we make selection in an economy? At individual level you should select among alternatives such as,

A) Whether to look at cricket highlights in T.V. or study for other additional hour;

B) Whether to purchase a text book for $ 50 or expend money for a movie;

C) Whether to assist your mother in shopping or play hockey throughout that time;

It is significant to note that selections are made up due to scarcity. When there is no scarcity, there would be no requirement to select. Likewise as choice should be made from alternatives, it includes comparison of cost and advantage.

 

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