1.4 Production possibility curve Flashcards
1
Q
What is a PPF/PPC
A
Production possibility frontier/curve. It is used to depict opportunity cost and show the maximum output of 2 types of products
2
Q
What does a movement along the PPF show
A
the reallocation of resources
3
Q
How does a PPF show opportunity cost
A
When moving along the PPF, you produce more of one good and produce less of another. The opportunity cost is the good you produce less of to produce more of the other good
4
Q
What causes a PPF to shift
A
The change in quality or quantity of the factors of production
