production possibility frontier Flashcards
examples of scarce resources
land
labor
resources
2 types of goods economies can produce
butter
guns
what does the point on the curve indicate on PPC/PPF
the best use of resources
what does the point under the curve indicate on PPC/PPF
not all resources used
what does the point above the curve indicate on PPC/PPF
unattainable with current resources
what does a straight line on PPC/PPF indicate
opportunity cost is constant
what are inputs
factors of production
what are outputs
products or services given to consumers
what is the production possibility frontier
the maximum quantity of goods that an economy can efficiently produce given the available inputs, it shows the opportunity cost of one good in terms of another
expansion of PPF
shifts to the right, indicating economic growth
contraction of PPF
shifts to the left
define productive effeciency
when an economy is on its PPF it cannot increase the production of one good without reducing the production of another
