Production Possibilities Curve & Efficiency — Transcript

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1. 0:01hello I'm WP Suazo and I want to talk to
2. 0:06you about the production possibility
3. 0:09curve in efficiency the numbers up here
4. 0:12along the top of the board represent a
5. 0:14Styrofoam factory that can make
6. 0:17styrofoam bicycle helmets styrofoam
7. 0:19coolers all these points listed here
8. 0:23represent goals that are efficient goals
9. 0:29that we're both numbers falling between
10. 0:33these numbers listed are also efficient
11. 0:37efficiency is one of the most
12. 0:38interesting things to define in the
13. 0:40class of economics but for our purposes
14. 0:42here something that is efficient is the
15. 0:45pair occupy either the same gap or point
16. 0:47so 48 is an efficient goal but so
17. 0:52wouldn't 50 and 5 because both 50 and 5
18. 0:57falling soon gap
19. 0:59alright let's consider some peers the
20. 1:04first one in the little can set up is 16
21. 1:07and 16 elements
22. 1:10what about 1600 well if we have 16 and
23. 1:1616 we can only make 16 helmets with no
24. 1:19coolers so 16 and 16 is something that
25. 1:23is not efficient but it's not
26. 1:25inefficient it is outside efficiency
27. 1:27because to take this proposed goal and
28. 1:29make it fit in here we have to reduce we
29. 1:32have to take away from this proposed
30. 1:33goal so this is outside or beyond what
31. 1:37we can do if we can still have 15 of
32. 1:41both 15 and 15 both fall on this gap 15
33. 1:50helmets is between 12 and 16 15 coolers
34. 1:54is between 28 and 0 so this 15 and 15 he
35. 1:59is efficient because both of these
36. 2:01numbers occupy the same gap let us
37. 2:08consider 12 and 12 well I
38. 2:12twelve helmets right here twelve twelve
39. 2:16helmets twelve helmets when we make
40. 2:19twelve helmets were expected to make 28
41. 2:21coolers not twelve so if we are
42. 2:24inadequate or inefficient we describe it
43. 2:30as such inefficient we know we are
44. 2:35inefficient when something's missing
45. 2:37when we have 12 helmets we make 12
46. 2:40elements we should have 28 coolers not
47. 2:44only 12 colors okay we keep on going
48. 2:48with the examples I would say 48 mate
49. 2:54well let's take a look 48th and 8th oh
50. 2:58there it is mr. right here at Point C so
51. 3:01if it's listed occupying the same point
52. 3:04it is efficient we also consider 43 and
53. 3:1213 okay hmm
54. 3:15is it efficient because we gave up five
55. 3:18coolers and we gain five helmets
56. 3:21one-for-one trade office is that
57. 3:24something that's possible that might be
58. 3:26possible between a and B but if we look
59. 3:29at the numbers here we don't seem to be
60. 3:31up in that realm
61. 3:32okay um 43 43 coolers is right here 13
62. 3:40helmets this 13 helmets fit between 8
63. 3:44and 12 no it does not so this goal this
64. 3:46proposal is too ambitious we have to
65. 3:49reduce it if it's too ambitious if it's
66. 3:51too big and we are outside of what is
67. 3:56possible let's consider 15 5 5 well 50
68. 4:07coolers here 60 coolers right here so 50
69. 4:11would be BMC it's 5/5 between B and C
70. 4:14yes it does so if a pair occupies the
71. 4:17same gap or a point is now these numbers
72. 4:23along the top of the board is a schedule
73. 4:26it would be better or more efficient I
74. 4:29should say if we had a mathematical
75. 4:31expression plug in one of these values
76. 4:34and this expression would tell us how
77. 4:36much of the other is possible but we
78. 4:38don't have mathematical expression here
79. 4:40we just have a let's consider this as we
80. 4:46go from 50 coolers and five elements to
81. 4:4955,000 seven elements since we're having
82. 4:52more in both categories that's economic
83. 4:54world when we went from 43 and 13 or 50
84. 4:58and five we gave up coolers to have more
85. 5:00helmets that's economics in any static
86. 5:03situation having one of more by giving
87. 5:06up something but this one here
88. 5:08represents economic growth is it
89. 5:10possible though 55 well 55 falls between
90. 5:15B and C as they're 7 helmets between B
91. 5:19and C so this one would also be
92. 5:21efficient but if we had a better
93. 5:24definition of efficiency through a
94. 5:28mathematical expression through an
95. 5:30equation then we wouldn't have this
96. 5:32happening but that's nothing to be
97. 5:37concerned about if your teacher is
98. 5:40teaching you this concept by using a
99. 5:42schedule like that okay uh let us
100. 5:45consider 62 and 662 coolers with six
101. 5:50elements they can look here of 6200 6262
102. 5:56coolers does a B is six helmets in the
103. 6:00interval a B no it's not someplace else
104. 6:02again 62 coolers we have to have one two
105. 6:06or three elements so this is too much or
106. 6:08we could say well the Tillman's we are
107. 6:13able to have six helmets if we're
108. 6:15willing to settle for 50 something
109. 6:17coolers not 62 so this one is outside
110. 6:20our capability what else do we consider
111. 6:27next how about twenty five and ten
112. 6:29twenty five twenty five coolers well 25
113. 6:34coulombs is
114. 6:36EEE does any fit in between 12 and 16
115. 6:41helmets no it does not
116. 6:43so this one to become efficient would
117. 6:47need units added to it so right now it
118. 6:49is it is insufficient
119. 6:58if efficiency is our goal let me write
120. 7:02that to the last two examples but I will
121. 7:05only give you one number so the first
122. 7:12proposal has 30 coolers so afraid to
123. 7:16make coolers and a complement of helmets
124. 7:21that would keep us efficient
125. 7:24how many helmets can be expected well
126. 7:26that's fine 30 coolest 30 coolers is
127. 7:30right in between seeing me so if we make
128. 7:3530 coolers we're also expected to make
129. 7:38between 9 and 11 pellets so anything on
130. 7:46the heavy end would constitute a goal
131. 7:48that's outside anything short of the
132. 7:52lower end which is 9 the constitutive
133. 7:54goal that's in the vision alright how
134. 7:58about making three helmets and a
135. 8:02complement of coolers that keeps us
136. 8:04efficient like let's take a look all
137. 8:05right three helmets three helmets falls
138. 8:09between A&B so we would be efficient
139. 8:11long as we make between 63 and 61
140. 8:17coolers as a party
141. 8:27I say you're given a pair if a pair
142. 8:32occupies a point you know it's efficient
143. 8:35if a pair occupies the same gap such as
144. 8:4130 in 10 that's also efficient but if
145. 8:46you're given a proposal where the pairs
146. 8:54of straps say 55 in 1055 and 10 you ask
147. 9:02yourself what do I have to do to take
148. 9:04that proposal and make it efficient if
149. 9:06you must reduce it 55 and 1055 who isn't
150. 9:11and Hovis is too ambitious
151. 9:12if we have to reduce it it is outside
152. 9:15conversely if we're offered of all we
153. 9:18make again 50 coolers but this time only
154. 9:22two helmets that one's too meek that
155. 9:25one's too small to make it efficient
156. 9:28either we have to make more helmets or
157. 9:31more coolers or two if you have to add
158. 9:33to appear then there you know that it's
159. 9:36inefficient I hope this is a shed some
160. 9:39light on this topic please look for my
161. 9:41other videos thank you