Two years ago I made the decision to go back to school. Best decision I could make at the time, but at what cost? At that time I thought I could work part time and go to school part time, and run our family business part time, and take care of the kids full time. I did not realize however, that my opportunity cost was going to be the school work. I have since then had to make choices to ensure that my school work was not sacrificed along with the other number 1 item on my list: my family! I have since then, quit the part-time job, lowered my involvement in the family business (as much as possible :) ) and tried to manage my time better (which is easier said than done!). My possibilities curve would have to a 3D cubic graph to properly represent my situation. Lol.
The possibilities graph is however not 3D, and is used to simplify the understanding of opportunity costs, scarcity, and maximum output given that society is fully employed. Economists use the possibilities curve to show us the various mixes of output that can be attained for certain items. It also gives a visual representation proving that our resources are scarce. If we decided to make more of one item, it will mean the sacrifice of making less of something else. I have never seen these graphs before, but I do think they really help drive home the point that our resources are scarce, what will happen when we make different choices, and what the cost of those choices will be.
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