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13 Cards in this Set

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