What reflects the model of the production possibilities of society. Solution

Under productive capacity of society the maximum volume of production achievable in a given period of time. According to its material content, such a volume of production is defined ambiguously. It may consist of different specific sets of products. Its achievement presupposes the complete and rational use the entire labor potential of society, the absence of useless losses of labor.

The production possibilities of society can be expressed by the formula:

PV = T P · Fri ;

where: PV - production possibilities of society; T P – labor potential of society; Fri- labor productivity.

If the production capabilities of society are fully utilized, then the increase in the production of any product can only be achieved by reducing the production of some other products, it involves the redistribution of social labor: an increase in its expenditure on the manufacture of some products and a decrease in the production of others. In this case, the reduction in the production of other products is a kind of payment for the increase in the production of this product.

With the development of society, the means of production and technology are being improved, the labor skills of workers are increasing, and more and more natural resources are being drawn into production. As a result, the boundaries of the production possibilities of society are moving apart, but in each specific period of time they remain set.

The full realization of the production possibilities of society is almost never achieved. This is due to the fact that usually some part of the labor potential is used irrationally or remains unused at all. The latter is expressed, for example, in the presence of unemployment, which currently takes place in all countries of the world.

To explain the concept of the production possibilities of society, it is usually used production possibilities curve. It expresses the relationship between the volume of production of any two types of products at full employment of production resources. If by full employment of resources we mean full use of the labor potential of society, then this curve reflects the real relationships that exist in the economy.

An example of the society's production possibilities curve is shown in Fig. 1. Taken as two items guns and butter. The abscissa shows the annual volume of oil production (tons), the ordinate shows cannons (pieces).

The production possibilities curve is a graphical representation of all combinations of oil and cannon production, assuming full use of the labor potential of society and constant volumes of production of all other goods. Its descending form means that with the full use of the labor potential of society and given the volumes of production of other goods, an increase in the production of one of the selected goods - guns or oil - leads to a reduction in the production of another.

Two dots A and B with coordinates ( X A, Y A) and ( X B, Y B) respectively depict different combinations of oil and gun production volumes. When moving from a combination A to the combination B oil production is growing ( X A < X B), while guns are reduced ( Y A >Y B). Under the assumed conditions, society, as it were, refuses to produce cannons in quantities ( Y A – Y B) (“opportunity cost”) for the sake of increasing butter production by ( X B – X A). (If, on the contrary, there is a transition from a combination B to the combination A, then there is a refusal to produce oil in the amount ( X B – X A) in favor of increasing the production of guns by ( Y A – Y B).)

The ratio shows how many cannons on average "cost" the production of an extra ton oils, other things being equal. The convexity of the production possibility curve away from the origin means that as oil production increases, each additional ton of oil requires more cannons to be abandoned.

This is explained by the fact that during the redistribution of labor and material resources from the production of guns to the production of oil, the production of oil receives resources that are less and less adapted for this production. In other words, additional labor, redistributed to the production of oil from the production of guns, has a lower productivity than already employed in this production.

The points of intersection of the production possibilities curve with the coordinate axes show the maximum production of oil or guns, respectively. for a given volume of production of all other products.

Dot V(inside the production possibilities curve) depicts a combination of oil and gun production that does not achieve full utilization of production possibilities. With this combination, it is possible to simultaneously increase the production of both types of products, for example, by switching to a combination A. In this case, an increase in oil production does not require a reduction in production of cannons, and "opportunity costs" are not defined, although an increase in the production of both oil and cannons requires additional resources.

point G(outside the production possibilities curve) corresponds to a combination of production volumes that is not achievable under given conditions. To reach it or come close to it, it is necessary to reduce the production of some other products.

If the volumes of production of all other products are unchanged, then the increase in production possibilities can be represented by a shift of the production possibilities curve to the right upwards.

It is important to understand that the production possibilities curve for any two products, including butter and guns, not clearly defined, but depends on what production volumes of all other goods. Therefore, an arbitrarily large number of different graphs of this curve can be constructed, corresponding to different variants of the distribution of social labor between different products. Practical application production possibilities curves do not have and are used only for educational purposes.

Production capabilities are the possibilities for the production of economic goods with the full and efficient use of all available resources and a given level of development of scientific and technical progress. Limited resources puts a limit on the possibilities of production. Using resources to create one product means forgoing the production of another. It forces you to make a choice; what products to produce, what needs to satisfy in the first place.
The essence of the problem of choice in conditions of limited resources can be understood by using the production possibilities curve (CPV). A production possibilities curve is a graph showing the whole set of options for using available resources for the production of alternative (alternative - allowing one of two or more possibilities) types of products (goods).
Let's take a textbook example. Let us assume that society needs the production of two products - butter and guns. Possible production volumes of two products with full use of limited resources are presented in Table. 1.1. Putting two products on the coordinate axes and connecting the points that reflect different combinations of the volumes of production of these products, we get a production possibilities curve (Fig. 1.2).

Table 1.1
Alternative opportunities for butter and gun production

Option	Oil, million tons	Guns, thousand pieces.
A	0	30
B	2	27
C	4	21
D	6	12
E	8	0

Rice. 1.2. Production Possibility Curve

The points on the production possibilities curve show all possible combinations of production of two products with full use of available resources and unchanged technology.
An analysis of the reduced production possibilities curve makes it possible to formulate a number of important economic propositions.
1. Law of substitution, cat. states that with full use of resources and unchanged technology, an increase in the production of one product leads to a reduction in another. Moving along the production possibilities curve, indeed, we see that with an increase in oil production, the output of guns decreases, and vice versa.
The following examples are often given to illustrate the operation of the law of substitution. In the USSR on the eve of the Great Patriotic War(1941 - 1945) there was full employment, all labor resources fully utilized, there was no unemployment. When the war began, it was possible to increase the production of military products only by reducing the production of civilian products. In the United States before the war (1939), labor resources were underused, unemployment reached 17.2%. When did the second World War, the United States was able to increase the production of both military and civilian products. By 1944, unemployment had fallen to 1.2%.
2. If the economy is at point N, this means that the available resources are not fully used: it is possible to increase the production of both guns and oil. Point N indicates underproduction and inefficient use of resources.
3. Point M with given resources and available technology for production is unattainable. But this does not mean at all that production possibilities cannot increase. There are two ways to expand production capabilities:
extensive - carried out by involving additional resources (increase in the number of employees, involvement in the processing of new reserves of natural raw materials, growth of capital investments without changing technical basis production);
intensive - achieved through better use of available resources (acceleration of scientific and technological progress and, on this basis, an increase in labor productivity and equipment, improved organization of production, etc.).
4. Any production is efficient if it ensures the full use of resources, i.e. if an increase in the production of one product leads to a decrease in the production of another product. Therefore, any point on the production possibilities curve is efficient.
Assume that the firm has a certain machine park and a certain number of employees and produces two products. If the machine park is fully used, all workers are loaded, then in order to increase the production of one product, it will be necessary to reduce the production of another. If it is possible to increase the production of one product without reducing the production of another, this means that the available resources are underused, i.e. production is inefficient.
5. Since an increase in the production of one product leads to a reduction in the production of another, the production costs of one product can be expressed in the amount of another product, the production of which has to be abandoned in connection with the production of the first. Thus, the increase in oil production from zero to 2 million tons "cost" 3 thousand guns, the production of which had to be abandoned. We can say that an additional 2 million tons of oil cost 3 thousand guns. In economics, such a cost or such cost of production is called opportunity or imputed.
The opportunity cost of producing a given good is the amount of another good that must be given up in order to produce an additional unit of that good.
6. Each subsequent 2 million tons of oil cost more and more.
The first 2 million tons cost 3 thousand guns;
the second 2 million tons - already 6 thousand guns;
the third 2 million tons - 9 thousand guns, etc.
The gradual rise in the cost of production of one product (and the convex form of CPV) are explained by the action of one of the most important economic laws - the law of increasing opportunity costs of production, cat. states that in conditions of full use of resources, in order to obtain each additional unit of one commodity, it is necessary to give up an ever-increasing amount of other goods.
This is explained by the fact that with an increase in the production of one commodity, in our example - oil, it is necessary to use resources adapted for the production of guns and unsuitable for the production of oil. Moreover, the more oil we want to produce, the less suitable resources we have to use.
Based on the above, we come to the conclusion that since the productivity of resources in different production processes is different, then switching them from one sphere of application to another causes an increase in the opportunity costs of production.

Lecture, abstract. 1.2. Production possibilities - concept and types. Classification, essence and features. 2018-2019.

Any economic system faces a dilemma: on the one hand, the needs of society are limitless, completely insatiable; on the other hand, the resources of society necessary for the production of goods are limited or scarce. The problem of limited resources is a fundamental economic problem.

The scarcity of goods means that for any person and society as a whole, most goods and services are limited, that is, not enough to satisfy all needs. Limited resources means that the production capabilities of society are limited, that is, society is forced to produce a limited amount of goods. Increasing the production of one good, society is forced to reduce the production of another. Choosing one production option, you have to sacrifice other options. Society is faced with a choice of what goods to produce, and which should be discarded. This problem faced all economic systems in the past, today and will face tomorrow.

Using the simplest model, consider the production possibilities of society. Consider a hypothetical economy that produces two goods - X and Y. Let us also assume that the amount of resources and production technology are constant. Let us assume that the given economic system is efficient, i.e., operates under conditions of full employment of resources and full production.

If absolutely all resources are directed to the production of good X, then society will receive the maximum amount of it. In this case, the good Y will not be produced at all (option A). Another alternative is possible, when all the resources of society are directed to the production of goods Y. In this case, the good Y is produced in the maximum quantity, and the good X is not produced (option B). However, society needs both goods at the same time, for which it is necessary to reduce the production of each of these goods below the maximum. In this case, there are many alternative options for production combinations of resources and the corresponding production structure (for example, options C, D, E). This situation can be represented graphically. We plot the amount of good X horizontally, and the good Y vertically. As a result, we get the production possibilities curve. Each point on this curve represents a certain combination of goods of two kinds. For example, point C represents a combination of Xc pcs. item X and Yc pcs. product Y.

Shows "the maximum possible volume of simultaneous production of two goods with given resources and technologies that a given society has.

The economy is efficient, when all points of possible combinations of production of two goods are on the frontier of production possibilities (i.e. A, B, C, D, E). The economic system is inefficient, when different combinations of production of two goods are located to the left of the production possibilities frontier (point F). In this case, society's resources are not fully occupied (unemployment, underutilization of production capacity, backward technology). Point F represents a combination of goods X and Y that is significantly less than what could be produced with the full and efficient use of available resources. Society must do whatever is necessary to move to the production possibility frontier. For a society that has a certain stock of resources and knowledge and provides a full volume of production, point G is currently unattainable. Any economic system at any given time has a limited capacity and cannot move beyond the production possibilities frontier.

The problem of choice is the main problem associated with limited resources. However, limited resources lead to the emergence of several more. Such problems are competition, rationing and discrimination. Since there are many options for using resources, and the number of these resources is limited, competition inevitably arises. Competition- economic rivalry of commodity producers, aimed at obtaining at their disposal the largest amount of resources. Rationing- a distribution system that establishes maximum amount a good or resource that an economic unit can acquire. Rationing is a way of allocating a good or resource whose supply is less than demand. In a free market, this situation does not arise. At one time, rationing was widely practiced in our country, which since 1917 has experienced various types of shortages and subsequent rationing. As an exceptional measure, rationing also takes place in the economy. developed countries. For example, in the United States during World War II, it was quite effective. Discrimination- Restriction or deprivation of access to any benefits of certain categories of citizens on the basis of race, nationality, social origin, political views, etc. An example may be discrimination in the labor market.

Economic science primarily studies economic needs and ways to satisfy them.

Depending on whether you are a pessimist or an optimist, you can choose one of two definitions of economic needs. From a pessimist's point of view, economic needs (economic needs) usually understood as the lack of something necessary for the maintenance and development of the individual, firm and society as a whole. Optimists prefer to define economic needs as internal motives for economic activity.

It is economic needs that act as an internal stimulus for active human activity. Needs are divided into primary, satisfying the vital needs of a person (food, clothing, etc.), and secondary, which include all other needs (for example, leisure needs: cinema, theater, sports, etc.). Primary needs cannot be replaced by one another, secondary needs can. The division of economic needs into primary and secondary is historically conditional, the relationship between them changes with the development of society.

With the growth of the wealth of society in the family budget of citizens, the share of expenditures on food is reduced, the share of services and durable goods is growing.

Means that satisfy needs are called goods (goods) . Some of them are available in almost unlimited quantities.
(for example, air), others - in a limited amount. The latter are called economic goods. They are made up of things and services.

Economic benefits are divided into long-term, involving reusable use (car, book, electrical appliances, videos, etc.), and short-term, disappearing in the process of one-time consumption (bread, meat, drinks, matches, etc.). Benefits include interchangeable (substitutes) and complementary (complementary) goods. Substitutes include not only many consumer goods and production resources, but also transport services (train - plane - car), leisure activities (cinema - theater - circus), etc. Examples of complementary goods are a table and a chair, a car and gasoline, a pen and paper. Economic benefits can also be divided into present and future, direct (consumer) and indirect (production).

To obtain the missing consumer goods, as a rule, indirect economic benefits are needed - resources:

The available resources we want to use are usually limited; in any case, they are fewer than necessary to satisfy our needs at a given level of social development. Of course, limited resources are relative. With the development of society, as a rule, it is overcome. However, at any given point in time, there is a limited amount of economic resources. This means that the simultaneous and complete satisfaction of all needs is fundamentally impossible. Consequence of limited resources is the desire for their best use. In this regard, economic science faces a double task - objective and subjective, or, in other words, positive and normative.

Resources such as land, labor, capital, to a certain extent
interchangeable, which finds its expression in production function . In the most general view it looks like this: Q = f (F 1 F 2 ,..,F n), where Q is the volume of production; F 1 F 2 ,....,F n - used production resources.

The multiplicity of economic goals with limited resources poses a problem economic choice (economic choice) - choosing the best of the alternative options for their use, in which the maximum satisfaction of needs is achieved at a given cost. Before every person, firm and society as a whole, there are problems of what, how and for whom to produce, that is, how to determine the conditions and directions for the use of limited resources. At the same time, economic science not only tries to fix what is, but also develops the best options solutions to the problems that have arisen. In the latter case, there is a problem rational housekeeping (econo­ mizing) : the whole society, as it were, participates in a game with strictly defined rules known in advance to all, like a game in
bridge. In this case, it is usually assumed that the economic entity
acts as "homo economicus" - a reasonable (rational) individual, well trained, having deep general and professional knowledge, as well as a large practical experience("human-computer"). Its goal is to achieve maximum results with a given resource input or to minimize costs while achieving the intended goal. Such a premise is rather unrealistic, since the existing statistics are too imprecise,
methods of analysis are rather crude, and information about the actual activities of economic entities is very limited. Nevertheless, optimization theory serves as a kind of guide to rational activity. V economic theory It was assumed that each economic entity seeks to maximize: the consumer - the satisfaction of his needs, the firm - profits, the trade union - the income of its members, the state - the level of people's welfare or, according to the theory of public choice, the prestige of politicians.

In reality, people always face opportunity costs. The production of one product means the rejection of another. A rational person must calculate not only future costs, but also the costs of unused production opportunities in order to make an optimal economic choice. The costs of one good, expressed in another good, which had to be neglected (donated), are called opportunity costs (opportunity costs), costs of unused opportunities or imputed costs.

Additional (marginal) benefits should not be less than additional (marginal) costs:

where MB (marginal benefit) - marginal benefits,

MS (marginal cost) - marginal cost.

Manufacturing Capabilities (production capacity) - the ability of society to produce economic benefits with the full and efficient use of all available resources at a given level of technology development. Possible output characterizes the production possibilities curve. Let's explain this with a hypothetical example. Let us assume that only two goods are produced in society: grain and rockets. If a society uses its resources to produce only grain, then it produces 5 million tons of it; if only for the production of missiles, then they are produced 6 pieces. With the simultaneous production of both goods, the following combinations are possible (see Fig. 1). The table shows that any increase in the production of rockets (from 0 to 6 pieces) reduces the production of grain (from 5 million to 0 tons), and vice versa. Line ABCDEZH, which is called a curve production possibilities (production possibility curve) , shows alternatives when resources are fully used. All points located inside the OAH figure mean incomplete use of resources, for example, point K (simultaneous production of 2.5 million tons of grain and three missiles). Conversely, any manufacturing program, characterized by points outside the OAS figure, will not be provided with available resources (for example, point I). The production possibilities curve usually has a convex shape (concave towards the origin). This means that by changing the structure

production, for example, in favor of missiles, we will use to a greater extent in the production of missiles resources that are relatively ineffective for this. Therefore, each additional rocket requires an ever greater reduction in grain production (and vice versa). The production of the first rocket caused a reduction in grain production by 0.2 million tons, the second - by 0.3 million, the third - by 0.6 million tons, etc. This example clearly illustrates law of diminishing productivity. The production possibilities curve is historical, it reflects the level of technology development achieved and the degree to which available resources are used. As resources increase or technology improves, the area of ​​the OAR figure increases, and the ABCDEJ curve shifts up and to the right.

In conditions of limited resources, the problem of economic choice is inescapable, however, in various economic systems it is handled differently. V traditional society the choice depends on traditions and customs, in a command economy - on the will of the ruling elite, in a market economy - on market conditions.

Opportunity cost (s)) is an economic term denoting the loss of profit (in the particular case, profit, income) as a result of choosing one of the alternative options for using resources and, thereby, refusal from other possibilities. The value of the cost of lost profits is related to the utility of the most valuable of the alternatives, which turned out to be unrealized. Opportunity costs are characterized by inseparability from decision-making (actions), subjectivity, expectation at the time of the action.

The problem of choice can be depicted using a graph called the Production Possibility Curve (CPV).

Imagine a certain state that faces a choice - what and in what quantity it produces: consumer goods or goods industrial purpose.

Based on the data in the table "Possible options for choosing a state", we will construct a graph called the "Production Possibility Curve"

Production Capabilities- this is the maximum amount of goods and services (in a certain set) that can be produced in a given period of time with given resources and technologies.

Production Possibility Curve- a graph showing many options for using available resources for production

alternative types of economic benefits.

The model assumes that the state under consideration produces two goods, for example, consumer goods and industrial goods. If society directs all its potential to the production of consumer goods, then their maximum number will be released with a complete cessation of the production of industrial goods.

Compromise options are also possible for the simultaneous production of both consumer goods and industrial goods. It is easy to understand that the entire set of points on the curve shows a possible technological choice. In reality, only one option (one point of the curve) is realized, corresponding to the actual choice of society. What the final choice turns out to be depends on many factors - economic, political, historical, social, etc.

For example, points: O - inside the curve, T - outside the curve, K - on the curve, show the following:

O - production capabilities are not fully used, the choice is inefficient.

T - this option is impossible, it is outside the production possibilities.

K - the choice is effective, all resources are involved.

With the help of the following graphs, the position and the possibility of displacement of the curve are analyzed. Possible various options displacement of the CPV.

Factors shifting the CPV:

Changing the volume of resources, the emergence of new types of resources;

-
change in applied technologies.

In any case, shifting the CPV up and to the right means an increase opportunities for the growth of production volumes, and not the direct growth of the volumes of production themselves.

Graphs in fig. Figure 3 illustrates another conclusion: the choice made by a society today determines its future production possibilities.

The choice of option M will provide an opportunity to increase production capabilities in the future. Choosing option H may lead to a reduction in production possibilities in the future.