PPF curves

Question 1

What is ment by the term PPF

Answer 1

Production Possibility Fronteirs

Question 2

What 2 things does a PPF show

Answer 2

1. The maximum possible production of 2 goods or services with given FOPs
2. The various combinations of 2 goods/ services that can be produced with given FOPs

Question 3

What is found on the axis of a Microeconomic PPF curve

Answer 3

X axis (named good/service)
Y axis (named good/service)

Question 4

What is found on the axis of a macroeconomic PPF curve

Answer 4

X axis serivce
Y axis Good

Question 5

What are the types of efficiency on a PPF curve?

Answer 5

1. Productive
2. Allocative
3. Pareto

Question 6

what is meant by Productive efficiency

Answer 6

The concept of producing the largest possible output from resources in an economy

Question 7

What is meant by Allocative efficiency

Answer 7

The concept of producing products for services that satisfy the needs of a society through sufficient allocation of resources at an equilibrium point

Question 8

What is meant by the term Pareto efficiency

Answer 8

A concept that states that you cant satisfy one group without taking from another group

Question 9

On a PPF explain what happens/can happen at productive efficiency

Answer 9

If the business/ organisation is productively efficient they can re allocate resources to specialise in the production of one product/ favour the production of a singular product

Question 10

How can the PPF shift inwards or outwards

Answer 10

Changes in the quality or quantity of factors of production

Question 11

Graphs can also shift in favour of one good/ service, Explain how

Answer 11

Line may shift to favour production of one good/ service as the quality and quantity of factors of production that specialise in that area have improved