00:00 let's say you're some type of a
00:02 hunter-gatherer and you're trying to
00:03 figure out how much of your time to
00:05 spend hunting and how much of your time
00:09 so let's think about the different
00:11 scenarios here and the trade-offs that
00:13 they involve and just for simplicity
00:15 we're going to assume that when you're
00:16 talking about hunting the only animal
00:17 around you to hunt for are these little
00:19 rabbits and when we talk about gathering
00:21 the only thing that you can gather are
00:22 some type of berries that'll keep our
00:24 conversation a little bit simpler so
00:26 let's think about all of the scenarios
00:27 so first let's call this first scenario
00:32 so let's call this the number of rabbits
00:35 the number of rabbits you can get and
00:38 then let's call this the number of
00:41 let's do this column is the number of
00:43 berries that you can get so if you were
00:45 to spend your entire day going after
00:47 rabbits all your free time out you know
00:50 making sure you have time to sleep and
00:51 get dressed and all of those type of
00:52 things let's say that you can actually
00:54 get five rabbits on average in a given
00:57 day but if you spend all your time
00:58 getting rabbits you're not going to have
01:00 any time to get berries so you're going
01:03 to be able to get zero berries now let's
01:06 say that you were to only try to let's
01:08 say you were to allocate a little bit
01:09 more time to get berries and a little
01:11 bit less time to get rabbits so we'll
01:13 call that scenario b
01:15 we'll call scenario b
01:16 the reality where you have enough time
01:19 to get four rabbits on average and when
01:22 you do that all of a sudden you're able
01:24 to get a hundred you're able to get a
01:27 hundred berries and when we do the these
01:29 different scenarios we're assuming that
01:31 everything else is equal you're not
01:33 changing the amount of time you have
01:35 either hunting or gathering you're not
01:37 changing the amount of sleep you're not
01:39 changing your techniques for hunting
01:41 rabbits or hunting berries or you're not
01:43 somehow looking to do other things with
01:45 your time so all other things are equal
01:48 and the general term for this and it
01:49 sounds very fancy if you were to say it
01:51 in a conversation is ceteris paribus
01:57 paribus which literally means so anytime
02:00 someone says oh and you know ceteris
02:02 paris we assume this variable changes or
02:04 whatever else they're saying we're
02:05 assuming everything else is being held
02:11 ceteris means all other things
02:17 you're probably familiar with etc
02:20 same word essentially other things in
02:23 paribus other things equal so you're not
02:26 when you're going from scenario a to
02:28 scenario b you're not changing the
02:29 amount of time you're sleeping you're
02:32 somehow the geography where you are
02:34 you're in a dramatic way you're not
02:35 changing uh you're not changing the
02:37 tools you use or the technology
02:39 everything else is equal the only
02:40 variable you're changing is how much
02:42 time you allocate to finding rabbits
02:44 versus finding berries so let's do some
02:46 more scenarios assuming ceteris paribus
02:50 so let me do scenario c
02:52 you could on average have enough time to
02:54 get three rabbits but if you get three
02:57 rabbits then all of a sudden you will
02:59 only be able to get or you will be able
03:01 to get or if you're only getting three
03:03 rabbits you're now looking to get 180
03:05 berries and let's do a couple more i'm
03:07 gonna do two more scenarios so let's say
03:11 if you reduce the amount of time you
03:13 spend getting rabbits so you get two
03:16 rabbits now all of a sudden you can you
03:18 have enough time on average to get
03:21 240 berries and then
03:25 you spend even less time
03:27 let's say you spend even less time
03:29 getting hunting for rabbits on average
03:31 then you have even more time for berries
03:34 and so you're able to get 280 berries
03:38 and then i'll do one more scenario here
03:40 so let's say scenario f and let's call
03:42 these the scenarios scenarios
03:45 scenario a a through f so scenario f is
03:48 you spend all your time looking for
03:50 berries in which case on average you're
03:52 going to be able to get 300 berries a
03:53 day but since you have no time for
03:56 rabbits you aren't going to get any
03:59 rabbits so what i want to do is plot
04:01 these and on one axis i'll have the
04:03 number of rabbits on the other axis i'll
04:05 have the number of berries so let me do
04:09 so this axis i will call this my
04:16 and we'll start that'll be zero and then
04:24 four and then that will be five rabbits
04:26 and then in this axis
04:29 this axis i will do the berries
04:32 i will do the berries so this right over
04:35 here let's make this
04:37 100 berries this is 200 berries
04:41 200 berries and then this is
04:43 300 berries and so this is my berries
04:49 now let's plot these points these
04:50 different scenarios so first we have
04:54 scenario a maybe i should do all these
04:56 colors in that scenario a color scenario
04:58 a five rabbits zero berries five rabbits
05:02 zero berries we are right over there
05:05 that is scenario a scenario b
05:09 scenario b four rabbits a hundred
05:12 berries four rabbits one hundred berries
05:15 that's right over there that's a hundred
05:16 berries so that is scenario b
05:21 scenario see three rabbits 180 berries
05:24 three rabbits 180 let's see this would
05:27 be 150 180 will be like right over there
05:32 if you have time for three rabbits you
05:34 have time for about 180 berries on
05:36 average so this is scenario
05:39 and then scenario d we have in white if
05:42 you have time for two rabbits you have
05:44 time for 240 berries so that is right
05:49 so this is scenario d because this is to
05:51 fit actually a little bit lower
05:53 so this would be 250 so 240 is a little
05:56 bit lower than that so it'll be like
05:58 right over there that is scenario d
06:04 you have if you have time for one rabbit
06:05 you have time for 280 berries so that
06:08 gets us right about
06:10 right about there that is scenario e and
06:13 then finally scenario f you are spending
06:15 all of your time looking for berries you
06:17 have no time for rabbits so all of your
06:20 time for berries no time for rabbits
06:22 zero rabbits 300 berries that's right
06:25 over there so this is scenario f
06:28 so what all of these points represent
06:30 these are all points and now this is
06:32 going to be a fancy word but it's a very
06:34 simple idea these are all points on you
06:37 as a hunter gatherer on your production
06:39 possibilities frontier because if we
06:42 draw a line i just arbitrarily picked
06:44 these scenarios although i guess you
06:46 could on average get four and a half
06:47 rabbits on average on average get three
06:49 and a half rabbits and then you'd have a
06:50 different number of berries so these are
06:52 all points on the different combinations
06:55 between the trade-offs of rabbits and
06:57 berries let me connect all of these let
06:59 me collect them in a color that i
07:00 haven't used yet so let me connect them
07:04 it should just be one curve so i'll do
07:06 it as a dotted line it's easier for me
07:08 to draw a dotted curve than a straight
07:10 so this right over here
07:12 this curve right over here represents
07:15 all the possible possibilities of
07:18 combinations of rabbits and berries i've
07:21 only picked certain of them but you
07:23 could have a scenario right over here
07:25 maybe we could call that scenario g
07:26 where on average the amount of time
07:28 you've allocated on average you would
07:30 get four and a half rabbits so some days
07:32 you'd get four rabbits then every other
07:33 day you'd get five rabbits so maybe it
07:35 averages out to four and a half rabbits
07:37 and then maybe it looks like you would
07:38 get about 50 berries in that situation
07:41 so all of these are possibilities you
07:42 don't have to just jump from four
07:44 rabbits to five rabbits or maybe you
07:46 know you're spending maybe in this
07:47 scenario you're spending
07:49 seven hours and this scenario spent
07:51 eight hours but you could spend seven
07:52 hours in a minute or seven hours in a
07:54 second so anything in between is
07:56 possible and all of those possibilities
07:58 all of those possibilities are on this
08:01 curve so these five scenarios actually
08:03 these six scenarios that we've talked
08:05 about so far these are just these are
08:10 on this curve and that curve we call
08:13 once again fancy term simple idea
08:18 production possibilities
08:25 i've put two eyes in there by accident
08:30 possibilities frontier
08:33 because it shows all of the different
08:35 possibilities we can do we can get three
08:38 rabbits and 180 berries two rabbits and
08:41 240 berry and 240 berries what we cannot
08:45 do is something that's beyond this so
08:47 for example we can't get a scenario like
08:50 this so this right over here would be
08:52 impossible impossible let me scroll over
08:56 to the right a little bit
08:59 see my scrolling thing okay
09:01 so this right over here is impossible
09:03 this point right over here where i'm
09:05 getting five rabbits and 200 berries if
09:08 i'm getting five rabbits i'm spending
09:09 all my time on rabbits i have no time
09:11 for berries or another way to think of
09:13 it if i'm getting 200 berries i don't
09:15 have enough time to get five rabbits so
09:17 this point is impossible this point
09:19 would be impossible any point that's on
09:22 this side of the curve is impossible
09:26 now any any point that's on this side of
09:29 the curve you can kind of view this
09:30 inside the curve or below the curve or
09:32 to the left of the curve all of these
09:34 points right over here are possible
09:37 all of these points right over here are
09:40 these points for example it is very easy
09:42 for me to get one rabbit and 200 berries
09:45 so that right over there is possible now
09:49 is that optimal no because if i were to
09:51 really work properly i could i could get
09:53 i could get many more berries or i could
09:55 get more rabbits for if i have 200
09:58 berries i could get more rabbits or if
10:00 i'm concerned if i only want one rabbit
10:02 i can get more berries so this is
10:04 possible all of the points are down here
10:06 are possible but they aren't optimal
10:08 they are not efficient so the points in
10:11 here the points in here will say that
10:16 efficient maybe somehow i'm not using my
10:19 resources optimally to to do this type
10:22 of thing when i'm over here or maybe i'm
10:24 just not being optimally uh focused or
10:27 whatever it might be if you're talking
10:29 about a factory setting when you're
10:30 talking about maybe deciding to make one
10:32 thing or another then maybe you just
10:34 aren't using your the the resources in
10:37 an optimal way now all the points on the
10:41 these are efficient you're doing the
10:43 most you can do right now we're not
10:45 making any judgment between whether any
10:47 of these possibilities are better than
10:49 any other possibility all we are saying
10:52 is that you are doing the most that you
10:53 can do any of these things you are
10:55 making the most use of your time
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