Production possibility Diagrams (1.1.5)

?
  • Created by: lee42
  • Created 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

Other cards in this set

Card 2

Front

Why is the PPF curved?

Back

Because of the law of diminishing returns

Card 3

Front

What can society choose on the PPF?

Back

Preview of the front of card 3

Card 4

Front

What is the law of diminishing returns?

Back

Preview of the front of card 4

Card 5

Front

Why does the PPF shift outwards?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Production possibility diagrams (1.1.5) resources »