PPF Curves

Question 1

What do PPF curves illustrate?

Answer 1

Different features of the fundamental economic problem, such as: resource allocation, opportunity cost and trade-offs, unemployment of economic resources, economic growth.

Question 2

What does the PPF curve show in micro?

Answer 2

It shows / illustrates the concepts of scarcity, resource allocation, choice, opportunity cost and efficiency.

Question 3

What is productive efficiency?

Answer 3

All resources are used as efficiently as possible to produce the maximum possible output

Question 4

Which points on the PPF curve are productive efficient?

Answer 4

ALL points on the PPF are productively efficient.

Question 5

What does productive efficiency mean for the economy?

Answer 5

For the economy as a whole, it is impossible to produce more of one good without producing less of another.

Question 6

What does productive efficiency mean for a firm?

Answer 6

For a firm, it means the average total cost of production in minimised. (lowest average production cost)