In this lesson we'll take a trip through production possibilities. Production possibilities is a handy little analysis that lets us consider what the economy is capable of doing, production-wise. We'll see have a production possibilities curve, the cornerstone of this analysis, is derived and how it can be used to understand several important concepts, including opportunity cost, unemployment, investment, and economic growth.

• The first unit begins this lesson by laying the foundations for production possibilities analysis, especially assumptions and limitations.
• We turn out attention in the second unit to the production possibilities schedule, a simple table that gives us a first shot on this analysis.
• The production possibilities curve is then derived from the production possibilities schedule in the third unit, with particular emphasis on the importance of opportunity cost
• In the fourth unit, we make use of the production possibilities analysis for an understanding of three important concepts: full employment, unemployment, and economic growth.
• And lastly, the fifth unit uses production possibilities to analyze investment in capital goods as a means of achieving economic growth.

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