Production Possibility Frontier Flashcards
1
Q
What does a PPF show?
A
The maximum combination of two economic goods that a country can produce with all its factors of production efficiently utilized and technology held constant.
2
Q
What does a concave PPF show?
A
An increasing opportunity cost along the length of the curve.
3
Q
What does a point on the line of a PPF mean?
A
Fully and efficiently utilized resourses
4
Q
What does a point inside the PPF mean?
A
Unemployment/ under utilized resources
5
Q
What does a point outside the PPF mean?
A
Unobtainable resources with the existing factors of production
6
Q
What type of shift will economic growth cause on a PPF?
A
Rightward
