Objectives:
Understand the concept of the production possibilities frontier and how it illustrates the trade-offs between producing different goods and services.
Understand the role of investments in increasing capital and expanding production possibilities.
Analyze the clip from Game of Thrones where Arya talks about reinvesting her profits and relate it to the concepts of capital and production possibilities.
Materials:
Graph paper and pens/pencils
Handouts with definitions of production possibilities frontier and investments
Video clip from Game of Thrones (Season 5, Episode 7). Link here.
Procedures:
Introduction (10 minutes)
- Begin by asking the students if they have ever had to make a choice between two things they want. For example, do they spend their money on a new phone or save it for a vacation?
- Discuss with the students that the concept of making choices applies to businesses and economies as well. This is where the production possibilities frontier comes in.
Instruction (30 minutes)
- Define the production possibilities frontier (PPF) as a graph that shows the maximum combinations of two goods or services that can be produced with a given amount of resources.
- Draw a simple PPF on the board and explain the concept of opportunity cost. Opportunity cost is the value of the next best alternative that is forgone when a choice is made.
- Use the PPF to illustrate the concept of trade-offs. For example, if an economy can produce either 100 units of food or 100 units of clothing with its resources, it must choose between the two. If it decides to produce more food, it must give up some clothing and vice versa.
- Explain the role of investments in expanding the production possibilities frontier. Investments in capital goods such as machinery, equipment, and buildings can increase the economy’s ability to produce goods and services.
- Show the clip from Game of Thrones where Arya talks about reinvesting her profits. Discuss how her decision to invest in a second bucket and then a cart allowed her to bring more goods to the market and make greater profits. Relate this to the concept of increasing capital and expanding the production possibilities frontier.
Application (20 minutes)
- Divide the students into small groups and give them graph paper and pens/pencils.
- Instruct each group to draw a PPF and label the axes with two goods or services of their choice.
- Ask the students to identify a point on the PPF and explain the opportunity cost of producing more of one good or service versus the other.
- Next, have the students discuss how investments in capital goods could expand the production possibilities and shift the PPF outward.
- Instruct the students to draw a second PPF that shows the expansion of the production possibilities due to the investments.
Conclusion (10 minutes)
- Recap the lesson and emphasize the importance of investments in expanding production possibilities and increasing economic growth.
- Ask the students to reflect on how they could apply the concept of reinvesting profits to their own lives or a hypothetical business.
- Provide handouts with definitions of production possibilities frontier and investments for the students to keep for future reference.