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13 Cards in this Set
- Front
- Back
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Draw a PPF curve
Why does it bow outward? |
increasing OC
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What is a Production Possibility Frontier
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the boundary between combinations of good and services that can be produced and those that cannot
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Where on a PPF are G/S attainable
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Production points inside and along the PPF are attainable
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Where on a PPF are G/S unattainable
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Points beyond the PPF
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Where are production points efficient
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Points along the PPF curve, one more good can be obtained by producing one less of another, each point involves a tradeoff
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Where are production points inefficient
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points inside the PPF are inefficient
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Why are production points inefficient
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resources are either misallocate or unused
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Opportunity Cost
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a ratio (lost/gained)
decrease in production of one good/increase of production of another |
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What shifts the PPF outward?
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*technology advances
*increase in resources, b/c creates economic growth |
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What shifts the PPF leftward?
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*decrease in resources
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What does unemployment do to the PPF?
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moves the nation from a point in the interior closer to the production possibility frontier
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Why is the PPF curve bow outward
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resources are not equally productive, PPF has increasing OC
therefore bows outward |
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10 M bottles of soda forgone
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What is the OC of making 20 m tapes
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