PPC/PPF Flashcards
1
Q
What is the Production Possibility Curve/Frontier?
A
A graphical representation of goods which can be produced if all resources are fully and efficiently utilised.
2
Q
https://upload.wikimedia.org/wikipedia/commons/6/67/Production_Possibilities_Frontier_Curve.svg
Label Point A, B, C, D and X
A
Point A is under employment
Point B, C and D are full employment, picking either one is known as opportunity cost.
Point X is unobtainable, but is obtainable if the curve was to shift to the right.
3
Q
What is opportunity cost?
A
The next best alternative that is given up when making a choice.
4
Q
How do you shift the PPF to the right?
A
By increasing the total amount of available resources, eg technological advancements or economic growth
