PPF (Production possibility frontiers)

• PPF stands for?

  Production Possibility Frontiers
• Production Possibility Frontiers

  1. shows the different combinations of economic goods an economy can produce when all resources are fully and efficiently deployed
• Production Possibility Frontiers


  are on the line of the graph
• A point inside the line on the graph shows

  not all resources are being fully and efficiently deployed
• A point outside the graph is

  impossible and not achievable
• Capital goods

  1. goods (machinery/ equipment) used in production of consumer goods
  2. eg a tractor
• Consumer goods

  1. goods bought by the end user
  2. eg parsnips
• Capital goods + consumer goods

  = ALL OUTPUT
• Movements across a PPF curve reveal

  an opportunity cost
• outward shifts


  1)show economic growth

  2) indicates an increase in productive potential
• inward shift

  1. shows a decrease in productive potential
  2. therefore shows negative economic growth
• A point inside the PPF diagram shows


  not all resources are being fully and efficiently deployed