Production possibility Frontiers (PPF's) Flashcards Preview

ECONOMICS -THEME 1 : Introduction to markets and market failure > Production possibility Frontiers (PPF's) > Flashcards

Flashcards in Production possibility Frontiers (PPF's) Deck (5)
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1
Q

What are PPF’s?

A

Graphical representations of several important economic concepts:

  • opportunity costs
  • economic growth
  • economic efficiency
2
Q

What do PPF’s and PPC’s both show?

A

The maximum productive potential of an economy, using a combination of two goods or services, when resources are fully and efficiently employed.

3
Q

What do points lying on the PPF show?

A

Efficient output combinations

4
Q

What do points below/underneath the PPF show?

A

Inefficient combinations - not all resources fully utilised

5
Q

What do points above/beyond the PPF show?

A

An output combination that is not yet attainable