Adding Complexity to the PPF: Part 1
Unit 1 · Lesson 1.9 · Last updated May 20, 2026
A 45-minute lesson deepening students' understanding of the PPF through factors of production, constant vs. increasing opportunity costs, and PPF shifts.
Overview
In this lesson students develop a more sophisticated understanding of the production possibilities frontier (PPF) by learning about factors of production, constant versus increasing opportunity costs, and shifts of the PPF. Note: This lesson assumes students have already been introduced to the PPF model in Lesson 1.8.
Video Tutorial
Learning Objectives
- Identify and describe factors of production.
- Apply the concepts of scarcity, choice, opportunity cost, and the interdependence principle to a production possibilities frontier.
- Explain the causes of shifts in the production possibilities frontier.
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Materials
- Instruction Slides (display during class period)
- Student Handout pp. 4–5 (1 copy per student)
- PPF Scenarios p. 6 (class set — 1 copy per 16 students, cut apart into slips)
Lesson Sequence
Slides 2–3
- Display Slide 2. Direct students to discuss their responses to the prompts on the slide with a peer, then discuss as a class. Note: Do not correct or clarify students' responses to question 4 — tell them they will discover the answer throughout the lesson. Additional educator tips and suggested answers are in the notes section throughout Instruction Slides.
- Proceed to Slide 3 and introduce the learning objectives for the lesson.
Slides 4–24
- Advance through Slides 4–5. Ask students to discuss their answer to the question with a peer, then call on several students to share. Tell students their responses all represent various factors of production.
- Distribute 1 copy of Student Handout to each student. Encourage students to add notes and drawings throughout the lesson. Pro Tip: The first page of Student Handout is formatted so it can easily become a review tool when students fold it along the vertical line separating notes/examples/sketches on the right from key topics on the left.
- Proceed to Slide 6. Define factors of production and remind students that a PPF illustrates what a producer is capable of producing given their available factors of production and current level of technology. Note: Alert students to the stumbling block (yellow warning graphic) — students often find capital confusing. More details on each factor follow in subsequent slides.
- Advance to Slide 7. Provide a brief description of natural resources and discuss the question on the slide.
- Proceed to Slide 8. Explain that many producers use intermediate goods rather than raw natural resources. For example, producers of dog houses and cat condos use lumber from a mill that has processed trees cut down by loggers. Note: Emphasize that intermediate goods are not one of the three factors of production.
- Advance through Slides 9–10. On Slide 10, alert students to the stumbling block — students often confuse physical capital (tools, equipment, buildings) with financial capital (money). Economists use the term "capital" for both, relying on context clues to determine which kind is meant.
- Display Slide 11. Ask students to discuss the question with a peer, then debrief as a class, clicking to reveal the correct resource types.
- Proceed to Slide 12. Remind students the PPF also reflects a producer's level of technology. Explain how economists define technology.
- Display Slide 13. Explain that a straight-line PPF appears when the factors of production used to produce both goods are the same and used similarly — switching between outputs is easy and the opportunity cost stays constant everywhere along the PPF.
- Advance through Slides 14–16 to illustrate constant opportunity costs in a PPF model.
- Display Slide 17. Introduce the bowed-out PPF shape, explaining that it means resources used to produce the two outputs are not perfectly adaptable or interchangeable. Remind students to record notes and drawings on Student Handout.
- Advance through Slides 18–19 to illustrate increasing opportunity costs.
- Display Slide 20. Ask students to discuss the prompt with a peer, then debrief as a class.
- Display Slide 21. Direct students to answer the questions first individually, then with a partner. After 3 minutes, debrief as a class.
- Proceed to Slide 22. Ask students to again consider the prompt from the activator. Accept student suggestions. If a rightward shift of the PPF is not suggested, introduce this idea.
- Display Slide 23. Explain that a rightward shift means Petland could produce a combination previously unattainable. Explain what can cause a rightward shift and provide examples. Click to reveal a question about the consequences, then discuss with a partner and debrief as a class.
- Advance to Slide 24. Repeat the process from the previous step for PPF shifts inward (to the left).
Slides 25–30
- Proceed to Slide 25. Place students into pairs (groups of 3 if needed). Distribute 1 PPF Scenario slip to each group. Note: Alternate between scenarios marked A and B so students will receive a differently lettered scenario when instructed to pass slips to another group.
- Display Slide 26. Direct student attention to the steps for completing the first practice problem under "PPF Practice" on Student Handout. Give groups 4 minutes to complete their first practice problem. Circulate to answer questions and offer clarification.
- Instruct groups to exchange their PPF Scenario slip with a nearby group, ensuring each group receives a different letter than before. Give groups 4 minutes to complete their second practice problem.
- Advance through Slides 27–30, clicking to debrief the practice problems.
Slides 31–32
- Progress through Slides 31–32. Tell students to follow the instructions on Slide 32. Collect Student Handout to look for patterns in student responses on the summarizer. If necessary, review topics of confusion at the beginning of the next lesson.
Aligned Standards
Voluntary National Content Standards in Economics
What Educators Are Saying
The scenarios were great and the slides explained things in simple language. I liked that the scenarios gave different examples so not everyone had the same thing — meaning 1A, 2A, 1B, and 2B. I like that it built on the previous lesson in complexity and that the content got harder incrementally.
My students loved how interactive they were able to be with their peers.
I can't believe all these lessons are free! They're 1 million times better than anything you'd find on TPT for 150 bucks. The slides, handouts, activities — everything is amazing! I teach AP Macro and Micro and will definitely be using this lesson for the PPF topic. Thank you so much for the time and effort you have put into this!