ppf

Question 1

define production possibility frontier

Answer 1

shows maximum possible output of two goods or services an economy can achieve when all resources are fully and efficiently employed

Question 2

why are PPFs curved

Answer 2

the law of diminishing returns

Question 3

whats the law of diminishing returns

Answer 3

the marginal output of consumers goods diminishes as more factor resources are allocated to it

Question 4

list factors that cause an outward shift in PPF

Answer 4

increase in quantity and quality of factors of production
an advance in technology

Question 5

list factors that cause an inward shift in the PPF

Answer 5

a decrease in quantity and quality of factors of production

Question 6

define non parallel shift

Answer 6

a technological advance in car production only

Question 7

explain a straight line in PPF

Answer 7

indicates resources are equally efficient at producing both goods