Topic 1.5 Production Possibility Diagrams Flashcards
1
Q
What does the Production Possibility Frontiers (PPFs) depict?
A
It depicts the maximum productive potential of an economy, when resources and efficiency are used well
2
Q
What do the points on on the curve mean?
A
It means it’s the most efficient combination of output on the PPF.
3
Q
What do the points under the curve mean?
A
Producing at those points is inefficient, and resources are not used to their full productive potential.
