1.1.4 Production Possibility Frontier

• What does PPF stand for and what does it mean?

  Production Possibility Frontier : the maximum combination of production possible using available resources and technology
• 1.) These points are the most efficient combination of output

  2.) These points are inefficient and resource are not be used productively

  3.) Producing is not possible with the current resources


  What does the different points mean :

  1.) A + B

  2.) C + D

  3.) E

  
• Opportunity cost : the opportunity cost 50 units of yogurt (90-40)


  What does this PPF show and the answer?

  
• Economic growth


  What does the outward shift represent?

  
• What are capital goods?

  Good which can be used to produce other goods eg machinery
• What are consumer goods?

  Good which cannot be used to produce other goods eg clothing