1.1.4 PPF

Question 1

What does a production possibility frontier show?

Answer 1

Shows the different combinations of economics goods that are able to make if all the recourses in an economy are fully and efficiently used.

Question 2

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What does A,B and C all point out on this PPF.

Answer 2

A - Inefficient
B - Efficient
C - Unattainable

Question 3

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What is shown on this PPF?

Answer 3

Economic growth.

Question 4

How does a PPF show opportunity costs?

Answer 4

PPF shows the only way to increase capital goods is to fargo some customer goods.

Question 5

Factors that would cause an outward shift in a PPF? (Economic growth)

Answer 5

Any increase in the quantity or quality of the factors of production.

Question 6

Difference between capital goods and consumer/customer goods?

Answer 6

Capital goods - Goods that are used to produce consumer goods, normally purchased by firms
Consumer goods - Goods that are brought by individuals to satisfy a want or need.

Question 7

Example of capital goods and consumer goods?

Answer 7

Capital - Timber
Consumer - Table (Want)