PPF Segment 1 Flashcards
1
Q
What is the economic frontier?
A
Outer limit of economic production
2
Q
What does PPF stand for and what does it do?
A
Production Possibilities Frontier, reflects a simplified version of reality displayed as a graph
3
Q
Define frontier
A
On a PPF graph, represents max. production with available resources (line between impossible & possible)
4
Q
What does producing on the frontier assume?
A
The economy is using all its resources and is using them efficiently
5
Q
What is another way of saying “producing on the frontier”?
A
Full employment
6
Q
What is lesson 1 of PPF?
A
Because resources are scarce, not everyone’s wants can be met
7
Q
Oil, watermelon and land are examples of what?
A
Natural resources
8
Q
On a PPF graph, all points above the frontier are what?
A
Unattainable with available resources
