In this module we construct a three person production possibility frontier and highlight how the efficient frontier exhibits increasing opportunity costs with increases in output. The construction is used to explain four sources of economic growth; increases in resources, increases in technological capabilities, the reemployment of unemployed resources, and the rearrangement of production on the basis of comparative advantage. The first two represent an expansion of the efficient frontier, the latter two represent movements to the efficient frontier.

Production and Comparative Advantage Part 2 - 45 minutes

Comparative Advantage Problem Hints - 7 minutes