1.1.4 PPF

Question 1

PPF

Answer 1

The maximum potential output combinations of two goods an economy can achieve with all resources are fully and efficiently employed

Question 2

Factors shifting PPF outwards

Answer 2

-Increase in quantity of factord of production e.g.migration
-Increase in the quality of factors of production e.g. training programs
-Advance in technology e.g. AI

Question 3

Factors shifting PPF inwards

Answer 3

-Decrease in quantity of factors of production e.g. war or natural disasters
-A decrease in the quality of factors of production e.g. loss of workers skills in a prolonged recession

Question 4

Capital good

Answer 4

Capital goods are physical assets or resources that are used in the production of goods and services.

Question 5

Consumer good

Answer 5

Consumer goods and services are products which satisfy our needs and wants directly