PPFs

Question 1

PPF

Answer 1

Production Possibility Frontiers
It shows the maximum potential of two or more goods or services when all the resources are used fully and efficiently

Question 2

The Law of Diminishing Marginal Returns

Answer 2

At some point, an extra worker will add less output to the total than the previous worker

Question 3

Straight line PPF

Answer 3

Then the opportunity cost will be the same along the length of the line.
Straight line shows constant opportunity cost

Question 4

Curved PPF

Answer 4

As more of one good is produced in the short run, the opportunity cost increases because of Law of Diminishing Marginal Utility

Question 5

Opportunity Cost of PPFs

Answer 5

If moving along x-axis, opportunity cost measured from y-axis
If moving along y-axis, opportunity cost measured from x-axis