Chapter 3

Question 1

Production Possibilities Frontier (PPF)

Answer 1

is the boundary between the combinations of goods and services that can be produced and the combinations that cannot be produced, given the available factors of production and the state of technology.

Question 2

The PPF puts in perspective:

Answer 2

Attainable and unattainable combinations; Efficient and inefficient production; Tradeoffs and free lunches

Question 3

Economic growth

Answer 3

is the sustained expansion of production possibilities.