CBSE Class 9 · Building Blocks in Economics: The Problem of Choice

Opportunity Cost and the Production Possibility Curve Class 9

Updated 17 October 2026 · Fact-checked

Because human wants are unlimited and resources are limited but have alternative uses, scarcity forces us to choose. The value of the alternative given up is the opportunity cost. The production possibility curve shows the combinations of two goods that can be produced with all available resources used efficiently; its downward slope shows that producing more of one good means producing less of the other.

Moving along the curve from B to C gives more barley but less wheat; that wheat given up is the opportunity cost.

Illustration drawn for QuestionBuddy.

Understand Scarcity, Opportunity Cost and the Production Possibility Curve

Needs and wants. *Needs* are essentials such as food, water and shelter. *Wants* are desires beyond essentials, such as gadgets or vacations. Wants are unlimited and keep changing: someone with a bicycle may next want a motorbike, then a car.

Resources and factors of production. Resources are what we use to produce goods and services. The factors of production are land, labour, capital and technology. Resources are limited but can be put to alternative uses: steel can become medical equipment, refrigerators or aircraft.

Scarcity and choice. Unlimited wants meeting limited resources create scarcity, and scarcity forces choice. Time is also scarce: an hour on games is an hour not spent on study or sleep.

Opportunity cost. Choosing one alternative means giving up others. The value of what is given up is the *opportunity cost*. NCERT's examples: a student with Rs 100 who buys a notebook gives up saving for a tennis racket; a farmer who grows sugarcane gives up the water saved and the soil health that millets and pulses would bring. Weighing opportunity cost improves decisions because it makes you compare what you gain with what you lose.

The Production Possibility Curve (PPC). It shows the different combinations of two goods that can be produced using all available resources efficiently. NCERT's farmer grows barley and wheat on the same land:

Combination	Wheat (kg)	Barley (kg)
A	100	0
B	90	25
C	70	50
D	40	75
E	0	100

Plot barley on the x-axis and wheat on the y-axis to get a downward-sloping curve. Each extra 25 kg of barley costs: A to B 10 kg of wheat, B to C 20 kg, C to D 30 kg, D to E 40 kg. The sacrifice rises as more land shifts to barley, so the opportunity cost per kilogram of barley increases: 0.4, 0.8, 1.2 and 1.6 kg of wheat (derived by dividing each loss by 25).

Reading a PPC.

A point on the curve is efficient: maximum output, no wastage.
A point inside the curve means resources are unused or used inefficiently; more of one or both goods is possible.
A point outside the curve is not attainable with present resources.
A shift outward (for example from better technology or more resources) widens the choices.

A PPC helps firms and governments plan.

Scarcity, Opportunity Cost and the Production Possibility Curve: key facts

Economic problem: Unlimited wants
Limited resources with alternative uses
Scarcity
Choice
Opportunity cost; Chain of ideas.
Opportunity cost: Value of the best alternative given up | On a PPC, units of the other good sacrificed; For one unit: loss of other good / gain of this good.
Factors of production: Land
Labour
Capital
Technology; Chapter list.
NCERT PPC points (wheat, barley): A: 100, 0
B: 90, 25
C: 70, 50
D: 40, 75
E: 0, 100; Barley on x-axis, wheat on y-axis.
Position on PPC: On the curve efficient
Inside resources unused or wasted
Outside not attainable; Reading the graph.

On the curve	efficient
Inside	resources unused or wasted
Outside	not attainable

How to answer Scarcity, Opportunity Cost and the Production Possibility Curve questions

Questions ask for definitions, examples of opportunity cost, calculation from the barley-wheat table, interpretation of points on or off the curve, and the reason for the curve's downward slope.

1For opportunity cost, name the option chosen and the best option given up.
2For a PPC calculation, subtract the neighbouring values of the two goods and divide for a per-unit cost.
3To place a point, compare it with the table: less of one good at the same level of the other (or less of both) means the point is inside the curve; more of one good at the same level of the other means it is outside, so unattainable.
4Explain the slope: resources are limited, so more of one good means less of the other.
5Check the arithmetic by adding losses (10 + 20 + 30 + 40 = 100).

Scarcity, Opportunity Cost and the Production Possibility Curve in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Evening choices

Suppose a student has two free hours. She can study for a test, play football, or help in a shop; she chooses to study.

What is the opportunity cost?

Try it first, then show the solutionSolution

List the alternatives: football or helping at the shop.
Opportunity cost is the value of the best one given up, not the sum of all.
If she values football most, football is the opportunity cost.

Answer: The opportunity cost is the next best alternative she gave up, for example the football game, not all the options added together.

Memory hook: Cost is the road not taken.

A small workshop

Suppose a workshop can use all its hours to make either 40 chairs or 20 tables per day, or mixes in between, with each extra table costing 2 chairs.

What is the opportunity cost of one table?

Try it first, then show the solutionSolution

20 tables replace 40 chairs.
40 / 20 = 2 chairs per table, at constant cost in this simple case.
More tables mean fewer chairs.

Answer: One table costs 2 chairs. In NCERT's barley-wheat table the cost per unit grows, but here the toy example keeps it constant to show the idea.

Memory hook: One more of this is less of that.

Tricks to remember Scarcity, Opportunity Cost and the Production Possibility Curve

Short memory aids. Say each one aloud once, then use it on a question the same day.

S-C-O
Scarcity forces Choice; Choice has Opportunity cost.
Use it when: The chain of the economic problem.
Curve position: On, In, Out
On = efficient; In = wasteful; Out = impossible.
Use it when: Interpreting points.
Factors: L-L-C-T
Land, Labour, Capital, Technology.
Use it when: Factors of production.

Scarcity, Opportunity Cost and the Production Possibility Curve: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Opportunity cost (MCQ) · 1 mark · MCQBoard level

A student has Rs 100 and buys a notebook instead of saving for a tennis racket. The opportunity cost is:
(a) the price of the notebook
(b) the tennis racket saving given up
(c) Rs 100 in total
(d) nothing

Try it first, then show the solutionSolution

Opportunity cost is the value of the alternative given up, here the racket saving (1 mark).

Answer: (b) the tennis racket saving given up

Example 2: Scarcity (2 marks) · 2 marks · Very short answerBoard level

Why does scarcity arise? (2 marks)

Try it first, then show the solutionSolution

Human wants are unlimited and keep changing (1 mark).
Resources are limited, though they have alternative uses (1 mark).

Answer: Scarcity arises because wants are unlimited and keep changing, while resources are limited, though they can be used in alternative ways. So choices must be made.

Example 3: Opportunity cost from the table (3 marks) · 3 marks · Short answerHarder board level

Use the barley-wheat table to find the wheat given up when the farmer moves from point B to point D. Also find the average wheat given up per kg of barley gained. (3 marks)

Try it first, then show the solutionSolution

B: 90 kg wheat, 25 kg barley; D: 40 kg wheat, 75 kg barley (1 mark).
Wheat given up = 90 - 40 = 50 kg for barley gained = 75 - 25 = 50 kg (1 mark).
Average = 50 / 50 = 1 kg of wheat per kg of barley (1 mark).

Answer: Moving from B (90 kg wheat, 25 kg barley) to D (40 kg wheat, 75 kg barley), the farmer gives up 90 - 40 = 50 kg of wheat and gains 75 - 25 = 50 kg of barley. On average 50 / 50 = 1 kg of wheat is sacrificed for every kg of barley.

Example 4: Assertion-reason: the table · 1 mark · Assertion-reasonHarder board level

Assertion (A): In the barley-wheat table, moving from point B to point C costs the farmer 20 kg of wheat.
Reason (R): Every extra 25 kg of barley in the table costs exactly 10 kg of wheat.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.

Try it first, then show the solutionSolution

B to C: wheat falls from 90 to 70, so A is true (1 mark).
The loss per 25 kg of barley is 10, 20, 30 and 40 kg, not constant, so R is false.

Answer: (c) A is true, but R is false.

Example 5: Rising costs (5 marks) · 5 marks · Long answerHOTS / competency

Using the barley-wheat table, (i) find the wheat given up for each extra 25 kg of barley, (ii) find the opportunity cost of 1 kg of barley in each step, and (iii) explain what the pattern shows. (5 marks)

Try it first, then show the solutionSolution

(i) A to B: 100 - 90 = 10; B to C: 90 - 70 = 20; C to D: 70 - 40 = 30; D to E: 40 - 0 = 40 kg wheat (2 marks).
(ii) Divide by 25: 10/25 = 0.4; 20/25 = 0.8; 30/25 = 1.2; 40/25 = 1.6 kg wheat per kg barley (2 marks).
(iii) The cost per kg of barley rises as more land moves to barley; check: 10 + 20 + 30 + 40 = 100 = total wheat given up (1 mark).

Answer: (i) Wheat given up for each extra 25 kg of barley: 10 kg (A to B), 20 kg (B to C), 30 kg (C to D) and 40 kg (D to E). (ii) Per kg of barley this is 0.4, 0.8, 1.2 and 1.6 kg of wheat. (iii) The opportunity cost of barley rises at each step, which shows that the more land is shifted to barley, the more wheat must be given up for every extra kilogram. The total wheat given up, 10 + 20 + 30 + 40 = 100 kg, matches the 100 kg of wheat at point A.

Example 6: Case: inside or outside? · 4 marks · Case-basedHOTS / competency

Read the case and answer the questions.

The farmer in NCERT's example considers three plans using all his land: Plan P: 70 kg of wheat and 40 kg of barley. Plan Q: 90 kg of wheat and 50 kg of barley. Plan R: 40 kg of wheat and 75 kg of barley.

(i) Which plan is on the table's curve? (1)
(ii) Which plan shows unused resources? Give a reason. (1)
(iii) Which plan cannot be achieved with the present resources? Give a reason. (2)

Try it first, then show the solutionSolution

(i) Plan R (point D) (1 mark).
(ii) Plan P: point C gives 70 kg wheat and 50 kg barley, so 40 kg of barley with 70 kg of wheat is inside the curve (1 mark).
(iii) Plan Q: 90 kg of wheat is possible only with 25 kg of barley (point B); with 50 kg of barley only 70 kg of wheat is possible (2 marks).

Answer: (i) Plan R, which is point D of the table. (ii) Plan P: the farmer could grow 50 kg of barley with the same 70 kg of wheat (point C), so P leaves resources unused. (iii) Plan Q: 90 kg of wheat goes with only 25 kg of barley (point B); at 50 kg of barley the maximum wheat is 70 kg, so Q is beyond the curve.

Where students lose marks in Scarcity, Opportunity Cost and the Production Possibility Curve

The slips examiners see most often, and what to write instead.

Mistake: Adding all alternatives
Misreading the definition.
Wrong working
Opportunity cost is everything given up.
Right working
It is the value of the next best alternative given up.
Do this: Name one alternative.
Usually costs: 1 mark.
Mistake: Wrong axes or direction
Casual graph work.
Wrong working
PPC slopes upward.
Right working
It slopes downward: more of one means less of the other.
Do this: Give the reason.
Usually costs: 1 mark.
Mistake: Arithmetic slip in the table
Subtracting wrong rows.
Wrong working
B to D wheat loss = 90 - 70 = 20.
Right working
B to D: 90 - 40 = 50.
Do this: Write both points first.
Usually costs: 1-2 marks.
Mistake: Mixing scarcity and shortage
Everyday meaning.
Wrong working
Scarcity means a temporary shortage.
Right working
Scarcity arises from unlimited wants and limited resources.
Do this: Quote the cause.
Usually costs: 1 mark.

Exam tips

Show both subtraction values for each step of PPC calculations; markers award method marks.
Always state which good is on which axis if you draw the curve.
Use NCERT's examples (notebook versus racket, sugarcane versus millets) in definition answers.
Check that the step losses add up to the total change.

Practice questions on Scarcity, Opportunity Cost and the Production Possibility Curve

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Which of the following is NOT a factor of production in the chapter?
(a) Land
(b) Labour
(c) Capital
(d) Wants
Hint
Factors are inputs.
Answer
(d) Wants
Q2 · 2 marks · Very short answerBoard level
Classify drinking water, a gaming console, a holiday abroad and a roof over the head as needs or wants, and say why wants never end. (2 marks)
Hint
Essentials against extras.
Answer
Drinking water and a roof over the head are needs; a gaming console and a holiday abroad are wants. Wants never end because they keep changing: once one is satisfied, people want something better.
Q3 · 3 marks · Short answerHarder board level
From the barley-wheat table, how much wheat must be given up to move from point C to point E, and what is the average sacrifice per kg of barley gained? (3 marks)
Hint
Subtract C from E.
Answer
C: 70 kg wheat, 50 kg barley; E: 0 kg wheat, 100 kg barley. Wheat given up = 70 kg for 50 kg more barley. Average = 70 / 50 = 1.4 kg of wheat per kg of barley.
Q4 · 1 mark · Assertion-reasonHarder board level
Assertion (A): A point inside the PPC shows that resources are not being used fully or efficiently.
Reason (R): A point inside the PPC can produce more of both goods if resources are used well.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
Hint
On, in or out.
Answer
(a) Both A and R are true, and R is the correct explanation of A.
Q5 · 5 marks · Long answerHarder board level
Explain the concept of opportunity cost with two examples, one from a student's life and one from a farmer's choice. (5 marks)
Hint
Value of what is given up.
Answer
Opportunity cost is the value of the best alternative given up when a choice is made. A student with Rs 100 who buys a notebook gives up saving for a tennis racket; the racket saving is the cost. A farmer who grows sugarcane for its high profit gives up the water saved and the soil health that millets and pulses would bring; those forgone gains are the opportunity cost. The idea matters because it makes us compare what we gain with what we lose, leading to better decisions, and because every choice under scarcity has such a cost.
Q6 · 3 marks · Short answerHOTS / competency
Suppose a country discovers a new technology that raises its potential output of both goods. What happens to its production possibility curve, and does the idea of opportunity cost disappear? Explain. (3 marks)
Hint
Shift versus slope.
Answer
The PPC shifts outward because more of both goods can be produced with the same resources, widening choices. Opportunity cost does not disappear: on the new curve, producing more of one good still means producing less of the other, because resources are still limited.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.What are the factors of production?Show answer
Land, labour, capital and technology.
2.What causes scarcity?Show answer
Unlimited wants and limited resources.
3.What is opportunity cost?Show answer
The value of the alternative given up.
4.Why does the PPC slope downward?Show answer
More of one good means less of the other.
5.What does a point inside the PPC mean?Show answer
Resources are unused or used inefficiently.

Scarcity, Opportunity Cost and the Production Possibility Curve: frequently asked questions

What is opportunity cost?

The value of the next best alternative given up when making a choice.

What is a production possibility curve?

A curve showing combinations of two goods that can be produced using all available resources efficiently.

Why is there scarcity?

Because human wants are unlimited and resources are limited.

What is the difference between needs and wants?

Needs are essentials such as food, water and shelter; wants are desires beyond essentials.