3.1 Production Possibilities
MyEconLab Concept Video
The wind is free, but wind power is not: it must be produced. It is one of the vast array of goods and services produced in the nation’s farms, factories, stores, offices, and construction sites. In 2015, 280 billion hours of labor equipped with $55 trillion worth of capital produced $18 trillion worth of goods and services.
Our production capability is enormous, but it is limited by our available resources and by technology. At any given time, we have fixed quantities of the factors of production and a fixed state of technology, so there is a limit to what we can produce. The economic problem is that our wants exceed what it is possible for our resources to produce.
Your task in this chapter ...
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