Production Possibility Frontiers Flashcards
What is ceteris paribus?
When all other factors remain the same.
What is the production possibility frontiers?
The production possibility frontiers shows the different combinations of the output of two goods. E.G GOOD Y AND GOOD X
SUCH AS OUTPUT GOOD Y INCREASES GOOD X WILL DECREASE.
What does the production of goods and services all have?
An opportunity cost
What does the PPF illustrates?
The ppf illustrates the problem of choosing how to use sacare resources when producing goods and services.
What does it mean when your producing along the graph?
That all the resources are being used.This means all the factors of productions are being used and no unemployment.
What does it mean when producing within the graph?
That mean not all the resources are being used(under-used).More resources can be used if there was more efficiency.Thereby,inefficient allocation of resources.
What does it mean when its outside the graph?
Its unobtainable and there is not enough resources to obtain the level of output.
What are the three concepts of ppf?
Opportunity cost,scarcity and choice
What is capital good?
A capital good gives a stream of income in the future e.g machinery
What is a consumption good?
A consumption good gives an immediate benefits to the consumer e.g a car.
What is a economic growth?
A economic growth is percentage change in the total output(gdp) of a country.
what does ppf shift inwards and outwards mean?
A shift inwards means a decline in economic growth whilst outward means an increase in economic growth.
