the PPC curve (lesson 4)

What is PPC

The production possibility curve

What does PPC show

shows the maximum possible combinations of two goods or services an economy can produce using its available resources and technology.

What does on the point on the PPC show

It shows efficiency

What does outside the PPC show

That it’s unattainable

What does inside the PPC show

That it’s inefficient eg.unemployment

What happens when an economy moves from one point on the PPC to another?

It changes the combination of goods it produces.

This creates an opportunity cost because producing more of one good means producing less of the other.

What are the 2 types of good on the PPC

Capital good and consumer good

What makes the PPC curve shuts outwards

If there is an increase in quantity or quality of an FOP

What makes a PPC curve shift inwards

If there is an decrease in quantity of quality of an FOP

What must you say at the end of a 6 marker question or when u explain a shift in the ppc curve

That this leads to an increase/decrease in the economy’s productive capacity of the PPC Curve which is also /is not also an long-run economic growth

What makes a PPC curve shift?

When there is an increase or decrease in the quality or quantity of the factors of production