At the end of this chapter, learners will be able to:
- Describe how market systems work
- Analyze Production Possibilities Frontier (PPF) and opportunity cost
- Explain Comparative Advantage and Trade
In 1968, the Rolling Stones recorded “You Can’t Always Get What You Want.” Economists chuckled because they had been singing a similar tune for decades.
English economist Lionel Robbins (1898–1984), in his Essay on the Nature and Significance of Economic Science in 1932, described not always getting what you want in this way:
Because people live in a world of scarcity, they cannot have all the time, money, possessions, and experiences they wish. Neither can society.
This chapter will continue our discussion of scarcity and the economic way of thinking by introducing the critical concepts of Production Possibility Frontier (PPF), Opportunity Cost, and Comparative Advantage as the basis for international trade.