Production Possibilites Curve Flashcards
(9 cards)
What is ceteris paribus
Concept that in order to understand the relationship between two factors, we need to analyse the impact of one factor on another factor while assuming nothing else changes
What is the production possibilities curve
Is used to model the concepts of scarcity, opportunity cost and effiecny
How many goods does the economy produce
2
What does the PPC map out
The maximum productive capacity of an economy
What is allocative efficiency
The particular mix of goods a society produces represents the combination that societies most demand
What is choice
Deciding between alternatives
What is productive / technical efficiency
The aim is to maximise the production of goods
Be on the PPC
What are consumer goods
Are items produced for the immediate satisfaction of individuals and community needs and wants
What are capital goods
Are times that hav not been produced for immediate consumption but will be used for the production of other goods
