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This Economics Concept Will Change How You Think About Your Potential
Understand your comfort zone and how to go beyond it
I never really understood the implications of living our lives in the comfort zone until I learned this one economics concept.
Economists often think in models. Models are a way of explaining abstract ideas by stripping them of complexities so they are easy to understand.
Economists often think in models to make sense of complicated economic concepts. These models are simplified representations of reality that strip away unnecessary details.
By focusing only on the essential elements, models help explain how different factors interact and predict outcomes more easily. One of such models is the ‘production possiblity frontier (PPF).’
The PPF is a model that simplifies how a business makes production decisions. It shows the best way to allocate resources to produce the maximum potential output of two goods or services.
Because the business doesn’t have unlimited resources, it faces trade-offs and opportunity cost when allocating resources.
The big decision the business has to make is figuring out how to get the most output using its resources in the best way possible.
