a) PPF curves and resources

• state the components of a PPF curve

• y-axis = capital goods

• x-axis = consumer goods

• gradient = not constant (line = outwards curve) + negative

• state what a position below the PPF curve represents in terms of the allocation of scarce resources and why

• state what a position below the PPF curve represents in terms of the production of capital and consumer goods

• pareto inefficient allocation of resources because some are unemployed

• possible production

• state what a position on the PPF curve represents in terms of the allocation of scarce resources and why

• state what a position on the PPF curve represents in terms of the productive potential of an economy

• state what a position on the PPF curve represents in terms of the production of capital and consumer goods

• pareto efficient allocation of resources because all are employed

• maximum productive potential of the economy

• possible production

• state what a position above the PPF curve represents in terms of the production of capital and consumer goods and why

• unobtainable production because of an insufficient unit of resources

• explain how to calculate the opportunity cost in capital goods from a PPF curve

• explain how to calculate the opportunity cost in consumer goods from a PPF curve

• the unit difference between the y-coordinate of the position and where the PPF curve meets the y-axis

• the unit difference between the x-coordinate of the position and where the PPF curve meets the x-axis