life & style // 10

 

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Production
Possibilities
Frontier

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Don't waste time

» Using cognitive discipline to put your knowledge to work

Nelu Oncel
Contributor

[oc heard that he who
says he knows everything
knows nothing. Knowledge
encompasses a breadth of
information that, without

the appropriate cognitive
discipline, cannot properly be
applied. Proper application of
knowledge entails analyzing
acquired information and
using it to make better

ultimately has the potential to
stimulate economic growth.
How do we interpret this

to boost overall growth? Well,

the two main sources from
which we derive what we know:
academia and personal life
experiences.

Academia teaches us the
facts while life experiences test
the validity of these facts. In
economics, for instance, we
study the allocation of scarce
resources efficiently in order
maximize our potential output,
but seldom apply this notion to

: our daily routines.

To illustrate, model A is

: an example of a production

: possibilities frontier (PPF). This
: curve represents all maximum

: output possibilities for two or

: more goods (choices) given our
: limited resources; anything

: beyond this point cannot be

: attained, and everything else

: within the curve is attainable.

All points along the PPF

: curve assume all resources

: are being used efficiently (in

an : . : other words, all our availabl

decisions, which takes time, but : . able
: resources are being used to

: reach our production capacity

: at every point on the line).

: .. } Seldom do we reach this

knowledge effectively and use it : ~~. .
: point, and it is usually due to

. : : lack of effort or misallocation

we can begin by acknowledging : :
: of resources—which, most

: importantly, are constrained by

: the time available to us.

With this simple economic

: concept in mind, let’s think

: about how we can allocate

: our efforts towards producing
: better decisions that are more
: likely to stimulate overall

: growth. But before I use an

: example let’s examine two

: factors that increase the PPF

Model:

~
B

 

 
  
   

An expanded
Production
Possibilities
Frontier

 

 

 

\

: curve (illustrated in model B by
: an outward shift of the curve),

: bringing about more choices to
: consider and further increase

: growth.

One factor is an

: increase in our available

: resources and the other is

: technological improvements

: or advancements. A resource

: is defined as “a source or

: supply from which benefit

: is produced.” Time can be

: seen asa supply. The only

: issue with time is that its

: quantity cannot be changed,

: although you can change how
: itis allocated. Therefore, if we
: collectively allocate our time

: towards productive efforts, we
: can indulge in the spoils of

: progress. However, allocating

: time in a productive manner is
: achoice.

So let’s look at two choices

: now that we might encounter
: as academics and analyze the
: results each produce.

Have you ever been caught

: up with your studies and gotten
: toa point where you feel like

: you know most of the material
: but at the same time don’t feel

: too confident? Then out of the
: blue a friend calls and asks you
: to go out toa movie. What do

: you think most of us would

: choose to do in this situation?

: Is it not fair to predict that most :
: of you reading might choose the :
: latter option?

There certainly isn’t

: anything wrong with taking a

: break from your studies, but

: rarely do we consider the true

: costs of our choices. So what

: have you truly sacrificed? Let’s
: exclude the cost of our evening
: and concentrate on the time

: we've allocated to such an

: activity. Are we better off when
: we get home and realize that

: now we have to review some

: of the material again, because

: we've either lost some of what

: we've spent so much time and

: effort in retaining, or need to go :
: over the last concept we didn't
: fully understand before we left? :
: : interests, an intrinsic flaw we

: possess that causes us to suffer
: the long-term repercussions of
: our actions—in effect, we learn
: the hard way.

At this point we're just

: catching up with time lost and
: going back to what we should
: have done before, whereas if

: we went with the first option

: and allocated our full time

: to studying we might receive

 

good x
yy,

: a better mark on the exam.

: Eventually, after persistently

: making the same choice, this

: could translate into acceptance
: into our dream university.

So aren't we just delaying
the things we know we should

: be doing? It gets to a point

: where an idea that could have

: been produced at an earlier

: time—and contributed to the

: stimulation of growth—is only
: delayed due a lack of effort

: and misallocation of time (i.e.

: making an unwise decision).

Growth begins with the

: meticulous consideration

: of choices and their costs

: (which, as explained, takes

: time). Avoiding choices with
: severe long-term costs that

: hinder growth should be of

: priority. The problem resides

in our nature not to act out

: of benevolence when making

choices but out of our own self-

So let’s work together and

: grow faster; let’s not waste time.