Production possibility curve Flashcards
1
Q
What does a PPC curve show?
A
A PPC shows what an economy or a society is capable of producing with its existing amount of land, labor, capital, and technology
2
Q
What does a straight line PPC show?
A
A constant opportunity cost
3
Q
Why is a PPC downward sloping?
A
Production of one girls can be increased, only after sacrificing some quantity of the other good
4
Q
What does a PPC shift show?
A
It means that the production capacity has increased or decreased. A shift out means an increase in factors of production and a shift in words means decrease of resources.
