Youre a politician running for national office and you just

You\'re a politician running for national office, and you just attended a seminar on economics where the Production Possibilities Frontier was explained. As it turns out, you\'ve decided to use this new knowledge to help explain some of your policy proposals as they relate to economic growth. What first thoughts have you come up with?

Solution

The first thing that will come to mind using the PPF would be the scarcity and opportunity cost of two different policy. PPF shows that we have scarcity and we can use our resources to fulfill only one demand at a time. Doing that we have to make a choice and prioritize things. We cannot choose both the objectives at a time and work on both of them, we can only choose one objective and if we go on increasing expenditure on that one objective we will have to spend less on the others.

PPF tells us that we can spend all our resource only on one goal and the more we spend on that the lesser resources we will have to spend on other. So, we have to make a choice to deal with the scarcity.