1.4 Flashcards
what does PPC stand for
production possibility curve
what is PPC
the production possibility curve that shows the maximum possible outputs for two goods or services with a given amount of resources
what will move the PPC curve to the right
- addition to resources, such as more available labour from immigration
- training of labour in the form of improvements to education
- improvements in technology, such as more efficient equipment
what does the position on the PPC indicate
that all resources are being used efficiently
what does the position inside the PPC indicate
that there are unemployed resources or an inefficient use of resources
what does the position beyond the PPC indicate
that it is impossible because the economy does not have sufficient resources to produce this combination of products
what makes the PPC curve to go inwards
- natural disasters
- loss of workers
identify what will happen to the PPC for consumer goods and capital goods when they have a faster computers and better technology
the PPC curve will shift outwards meaning that the consumer and capital goods will increase
identify what will happen to the PPC for consumer goods and capital goods when there is a destruction of power plants
the PPC curve in shift inwards as the agriculture and crops will be destroyed
identify what will happen to the PPC for consumer goods and capital goods when they have high unemployment
the PPC curve will stay the same as the employees are not dead, they are just not in work. The point will be inside the curve as the workers are just not being used meaning that it is insufficient
identify what will happen to the PPC for consumer goods and capital goods when they have a better education
the PPC curve will move outwards, but it does not mean that the goods increase, but the quality of workers increase, meaning that the amount of goods and services will potentially increase
how does the PPC shift
when there is a change of quantity of resources or a change in technology
Explain the significance of a production point inside a PPC and a production point on its PPC
A point inside a PPC means output is lower than potentially achievable when there are unemployed resources and when there is
inefficient use of resources. A point on a PPC means output is at its maximum that all
resources are employed meaning that all resources are being used efficiently. A production point shows a combination of goods produced
Analyse, using a production possibility curve (PPC) diagram, the effect of an increase in enterprise on an economy
Enterprise is a factor of production, there will be more risk takers and more enterprise increases productive capacity, maximum output that can be produced which causes
economic growth
