Production Possibility Frontiers (PPFs)

Question 1

What is a PPF?

Answer 1

Production possibility frontier- shows maximum potential level- output- combination of 2 goods or services- economy can achieve when all resources are fully & efficiently employed, given- current level of 💻 📱

Question 2

What are the 2 things change in the economy can lead to?

Answer 2

1) Economic growth

2) Negative Economic growth

Question 3

What is economic growth?

Answer 3

Economic Growth 👍- ⬆️ production of 🚘 & 🧹 in an economy- outward shift of PPF curve- caused by ⬆️ in quantity/quality of resources, ⬆️ investment, new 📱 💻

Question 4

What is negative economic growth?

Answer 4

Negative Economic Growth 👎- ⬇️ production of 🚘 & 🧹 in an economy- inward shift of PPF curve- caused by⚔️ or natural disaster

Question 5

What does it mean if an economies production is located inside the PPF curve?

Answer 5

Inside PPF curve- inefficient allocation of resources- not all being used- utilising unemployed resources carries no production cost

Question 6

What does it mean if an economies production is located on the PPF curve?

Answer 6

On PPF curve- efficient allocation of resources- none wasted

Question 7

What does it mean if an economies production is located outside the PPF curve?

Answer 7

Outside PPF curve- unattainable with current resources available