1.1.4 Production Possibility Frontier

Question 1

Production possibility frontier (PPF)

Answer 1

Shows the maximum potential level of output for two goods & services that an economy can achieve when all of its resources are fully and efficiently employed, given the level of technology available.

Question 2

Consumer goods

Answer 2

Goods that are present for us. They are the end result of production and manufacturing and what consumers see in store. They directly provides utility to consumers.

Question 3

Capital goods

Answer 3

Used to increase the future capacity of the economy. A good used to produce consumer goods or services.

Question 4

Margin

Answer 4

How many units of a consumer or capital good have been sacrificed to make another. A point of possible change.

Question 5

Frontier

Answer 5

Maximum combinations that can be chosen.