Wanna post up a example of PPF curve by my classmate Kelvin~
Explaination of the graph as illustrated above:Opportunity Cost between Love and Money
Assuming that
i. There are two person involved &
ii. Both are in a relationship
iii. Their character remains unchanged.
100% love = 0% money
All the time is devoted in the relationship, hence money is forfeited.
100% Money = 0% Love
Coz all the time is devoted on business/ establishing career.
Therefore, if an individual want more money, he must give up more love. If he decide that he wants more love, he must spend more time with it, hence lose chance to make money. This is illustrate by the concave curve in the graph. Love/Money relationship can move along any point of the PPF curve, and it illustrate the concept of opportunity cost- to recieve one unit more of love, you have to give up another unit of money, or vice versa.
Any point outside the curve indicates 100% Love + 100% Money. It is desirable but highly unattainable.
If the point falls inside the curve, it means not using its time efficiently in devoting to developing love or making money. Therefore it is not using its resources efficiently.
All theory provided by Mr Kelvin Yap from RMIT Bachelor of Economics & Finance.
