Production possibility Diagrams (1.1.5) 0.0 / 5 ? EconomicsProduction possibility diagrams (1.1.5)ASAQA Created by: lee42Created on: 23-05-19 09:03 What does the slope of the PPF represent? Opportunity costs 1 of 10 Why is the PPF curved? Because of the law of diminishing returns 2 of 10 What can society choose on the PPF? Any 2 goods on or inside the PPF 3 of 10 What is the law of diminishing returns? As you increase units of one resource and keep other factors constant the marginal benefit from the extra unit will decline 4 of 10 Why does the PPF shift outwards? It shows economic growth 5 of 10 What is a tradeoff? A tradeoff occurs when increasing the number of good x they produce they must give up producing some of good y 6 of 10 What does the point underneath the PPF represent? This means not all economic resources are being deployed 7 of 10 What does the point outside the PPF represent? It currently shows that its not possible to be producing at that point 8 of 10 What does the points on the PPF represent? It shows the points are productively efficient 9 of 10 What is allocative efficiency? It refers to a point on the PPF not the entire curve 10 of 10
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