The graphs in chapter one are representing production possibilities within a society with limited resources. They show the relationship between resources and output of product and that there is a direct affect.For example when the spciety decides to use more time and resources on producing cars then the amount of wheatthat is produced and harvested will decrease. It shows all the possibilities of what would happen when you produce more of one item than the other and the output possibilities along a spectrum and what you would have to give up in order to produce what the society would like to. The figure 1.3 shows how technology can affect change in a production possibilities curve weather it sty the same or changes.
The figures show that your decision to produce more of one item than anouther can cause scarcity of an item. This scarcity can then effest the prices of item and this can force the consumer to make a choice about what they are going to spend thier money on. This can limit peoples' choices as they could no longer be able to afford certain items.
I have experienced this before, when I was living at home I was not paying rent and I had a car and I drove everywhere, I went out for dinner and drinks with friends all the time. It didn't matter how much I was spending I was working and had no expenses. When I then got my own place and started to pay for rent, food, utilities, insurance and all the other costs that come along with living on your own I had some choices to make. As I had a scarce income I had to make some choices as to what was more important to spend my money on. I had to eat out less and stay home more and I had to start driving less and making different choices on where I was shopping and watch sales on food and such items. So in a way everyone experiences scarcity and opportunity cost and these affect our choices in how we spend our money.
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