>> Today we are going
to talk about efficiency

and the production
possibility frontier.

But first, I have to tell
you a story about something

that happened in
my classroom once.

The janitors had gone on
strike and so the professors

and the students were
given assignments

to clean the classrooms.

I had five students on my
team and we had two tasks:

to scrape gum from
under the desks

and to clean dust
from the lights.

At first, I had all
the students crawling

around under the
desks scraping gum.

We were able to scrape
a lot of gum that way,

but we weren't getting
any of the lights cleaned.

So I needed to switch
over a student

from gum scraping
to light cleaning.

Who should I switch over?

Yeah -- Mark -- the tall guy.

Why? He had the lowest
opportunity cost

of cleaning lights.

When we switched him over,

we gave up very little
gum scraping,

because that was
hard for him to do.

But we got a lot of lights
cleaned because he is so tall.

But what if we needed
even more lights cleaned?

We would have to switch
more students over

and give up more gum scraped.

Who is the next person
to switch?

Maria, because she
is the next tallest.

Relative to Mark, she gives
up a bit more gum scraped

and cleans a few less lights.

But she still has the lowest
gum cleaning opportunity costs

of those remaining.

We can continue the process

until we have got
everyone except Alex,

the shortest student,
cleaning the lights.

Alex is great at scraping
gum and she would be terrible

at cleaning the lights.

If we switch her over, we
would be giving up a lot

of gum scraped and getting
very few lights cleaned.

When we graphed the different
combinations of students

and tasks, we found
that we had a production

possibility frontier.

It is bowed outwards because
different resources --

workers, in this case --
have different abilities,

and that means different
opportunity costs.

But what would have happened if,
when everyone was scraping gum,

I had switched over Alex,

the shortest person,
to cleaning lights?

That is exactly the
wrong thing to do.

We would have given
up lots of gum

and gotten few lights cleaned.

Relative to the original plan,
that would have put us here.

Economists call a point
like this inefficient.

You are not using your
productive resources in a way

that produces the
most possible output.

Do you need to bring
in more workers

to get the cleaning done?

No. You just need to
rearrange who is doing what

and you get more of both.

Any point that is on the
PBF is considered efficient.

Some points have
more gum scraped,

some points have
more lights cleaned,

but you are getting the most out
of your workers at every point.

When you are efficient, you
can't get more lights cleaned

without giving up
some gum scraping.

How about a point way out here?

That would be great.

We would get tons of both goods,
but with the current numbers

of workers and their
current abilities,

we just can't produce there.

This is called infeasible.

The only way we can get to that
point is by adding more workers

or by making each
worker more productive.