1.1.4 - 1.1.5

Question 1

what is a production possibility frontier

Answer 1

Depicts the maximum productive potential of an economy, using a
combination of two goods or services, when resources are fully and
efficiently employed

Question 2

what are factors of production

Answer 2

resources input available in an economy to create goods and services

Question 3

factor endowment

Answer 3

the stock of factors of production

Question 4

what are capital and consumer goods

Answer 4

used to increase the future capacity of the economy

for present use

Question 5

points of a ppf

Answer 5

a - maximum level of production
b - resources could be used more efficiently
c - unobtainable level of production
d -

Question 6

why is the ppf curved

Answer 6

resources that arent adding much to either but will be more productive in the production of either

Question 7

allocative efficiency

Answer 7

all goods and services meet the needs and wants of society

Question 8

productive efficiency

Answer 8

the 100% utilisation of raw materials to produce goods

Question 9

what will cause the ppf to shift right

Answer 9

advancement in technology
increase in availability of resources
improved efficiency

Question 10

what will cause the ppf to shift left

Answer 10

unemployment rates going up
decline in economy

Question 11

specialisation

Answer 11

production of a limited range of goods and services which means trade is essential to be able to access all needs

Question 12

division of labour

Answer 12

labour becomes specialised in a particular part of the production process