ppf curves

• what are PPF curves?

  Production Possibility Frontier (PPF) curves show the maximum amount of two goods or services that an economy can produce.
• productive efficiency


  producing the most amount of goods

  (shown on ppf curve)
• allocative efficiency


  producing where demand meets supply

  goods and services that people actually want
• why is it drawn concave?

  due to imperfect factor substitutes
• what does an outward shift show?

  economic growth

  able to produce more and get more money
• what can cause an outward shot on a ppf?

  increase in resources or technological advancements.

  population growth (more labour)
• what does an inward shift show?

  economy may fall

  producing less
• what can cause an inward shift on a ppf?


  technology crash, natural disaster, change in trade, pandemic, war
• uses of a ppf curve

  • track whether resources are being used effectively (on the curve)
  • track economic growth or decrease
  • unemployment
• why is operating within ppf curve undesirable 


  • not fully utilising what they have access to
  • less profit for firms