Creating and interpreting a production possibilities curve

Lucy Malakar, Lorain County Community College,
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Initial Publication Date: August 19, 2018

Summary

Students will read an article about how the hurricanes of September 2017 damaged crops in Georgia and use the information provided to create a production possibilities frontier. Students will use their production possibilities frontier to analyze opportunity costs and trade-offs and understand what impacts production possibilities.

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Context for Use

Course: principles
Class size: 50 and under
Prior knowledge: students should know what a production possibilities looks like and what it represents
Time: About 45 minutes: 15 minutes to read article, 15 minutes to work in groups to create PPF, 15 minutes to discuss

Overview

Students will read an article about how the hurricanes of fall 2017 damaged crops in Georgia and use the information provided to create a production possibilities frontier. Students will use their production possibilities frontier to analyze opportunity costs and trade-offs and understand what impacts production possibilities.

Expected Student Learning Outcomes

Students will draw a production possibilities curve to analyze opportunity costs and trade-offs and understand what impacts production possibilities.

Information Given to Students

Last year, we heard a lot about the damage that hurricanes caused in Florida and especially in Puerto Rico. But, hurricanes are large storms whose impact is felt across several states.

In this exercise, you will use the information in "Thanksgiving Pecan Pies at Risk After Irma Ravaged Orchards" to determine what happened to Georgia's production possibilities as a result of Hurricane Irma (August 2017). Suppose blueberries and pecans are Georgia's two main crops, work with your group to:
1. Draw a production possibilities frontier that shows the tradeoff between blueberries and pecans. (Be sure to label your axes and first PPC.)
2. Demonstrate what happened to Georgia's production possibilities as a result of Hurricane Irma. (Clearly label your new PPC.)
3. Suppose genetic modification makes blueberries resistant to insects, allowing yields to double. Illustrate the effect of this change on your initial production possibility curve.
4. Suppose Georgia passes legislation that leads to a mass exodus of migrant farm workers (who are largely immigrant and many undocumented). Show the effect of this legislation on the Georgia's production possibilities for blueberries and pecans.
Reporting will be done in gallery walk format.


Article about hurricane damage to Georgia's pecan crop in 2017 (Microsoft Word 2007 (.docx) 86kB Jul13 18)



Teaching Notes and Tips

Facilitation Guide:

Hurricane Irma struck the southern US a couple of weeks before Hurricane Maria decimated Puerto Rico. As of June 2018, almost a year after Hurricane Maria hit, the death toll from the storm is still being disputed and thousands are still without power. Justifiably, there was much media coverage of this devastating storm. Hurricane Irma had far less coverage but an outsized economic impact on pecan production in the United States.

Prefatory remarks:

We've heard a lot about Hurricane Maria and its devastating impact on Puerto Rico. Hurricane Maria hit in September 2017 and as of June 2018, the death toll is estimated at nearly 1,500 lives and about 7,000 people are still without power. Climate catastrophes have serious economic impacts and in ways you may have never previously considered.
What is your favorite Thanksgiving dessert? Pumpkin anything is hugely popular with most of us but in the South pecan pie is the popular choice. Hurricane Irma, a lesser known 2017 storm, will have a lasting impact on Thanksgiving pecan pies.

Discussion questions:

How do production possibilities curves show tradeoffs?
It seems obvious that Georgia's production possibilities decreased due to Hurricane Irma. So, how do we show that with a PPC? (Can also ask questions about market impact depending on student knowledge of material: What impact would this have on the market for pecans? Which curve would shift and in which direction?)
Does the entire curve shift if genetic modification increases the production of blueberries? Would being able to grow more blueberries have an impact on pecan production? Why or why not?
In 2011, Alabama passed anti-illegal immigrant legislation that resulted in many immigrants (both legal and undocumented) to leave the state. Farmers reported tomatoes and other crops rotting on the vine, clearly an unintended consequence. If something similar were to happen in Georgia, how would you show that on the PPC? Does the curve shift? Does it change the amount of blueberries or pecans that CAN be produced?
What are some things (realistic or not) that would shift Georgia's PPC outward?
Can you think of another set of tradeoffs that could be represented by a PPC? (examples: 10 hours to study for 2 tests; $50 to spend at store, etc.)

Closing remarks:
Top 3 takeaways
1. A production possibilities curve is the graphical representation of tradeoffs. As long as an entity is producing ON its PPC, more of one item can be produced only if less of the other is produced
2. Natural disasters as well as government policies can have a big impact on production possibilities in both directions (think about the economic impact of expelling all DACA recipients or ever stronger, more severe storms); there is a difference between reducing production possibilities (inward shift) and not fully using all resources like labor (point inside the production possibilities curve)
3. Some things will shift the curve out, allowing for increases in both items; while other changes might just impact the production of one item

Assessment

Initial assessment will be via creation of PPF

References and Resources

Article URL:

https://www.bloomberg.com/news/articles/2017-09-14/irma-s-long-gone-but-thanksgiving-pecan-pies-are-still-at-risk