PPF

• Production possibility frontier - max output two g/s than an economy can produce given it current available resources
• The curve show the predicted potential an economy has in production

  Point c is above therefore unattainable with Current available resources

  Point B is on the curve therefore productively efficient

  Point A is beneath the curve therefore Productively inefficient Given available resources as it is below its potential

  
• Production Possibility Frontiers (PPFs) are a graphical representation of an economy's maximum production potential given its resources and technology
• PPFs show the trade-off between producing different combinations of two goods/services
• Marginal analysis involves analyzing the cost and benefit of producing one more unit of a good
• Economic growth is depicted by a shift of the PPF outward, showing an increase in an economy's productive capacity
• Economic decline is represented by a shift inward, indicating a reduction in productive capacity
• Points on the PPF represent efficient resource allocation, where all resources are fully utilized
• Points inside the curve indicate inefficiency, where resources are underutilized
• Points on the PPF are attainable given current resources and technology
• Points beyond the PPF are unattainable without changes in resources or technology
• Movements along the curve represent changes in the quantity produced of one good while holding the production of the other constant
• Shifts in the PPF represent changes in the economy's overall production potential
• Example: If a nation reallocated its labor force from manufacturing to services, it would lead to a movement along the PPF, producing more services at the expense of manufacturing