Production possibility frontiers

PPF

shows the maximum possible output combinations of two goods or services an economy can achieve when all the resources are fully and efficiently employed.

Curve ?

PPS are curved because of law of diminishing returns (the marginal output of consumers goods diminishes as more factor resources are allocated to it)

Explain the points

A: efficient, opportunity cost of farming

B: efficient, opportunity cost of fishing

C,D: efficient

E: inefficient

F: Unattainable

Causes of outward shift of PPF (opposite for inward shift)

1)Increase in quantity of FOP

2) increase in quality of FOP

3)An advance in tech

4) improved education and training and health.

Non-parallel shift

Technological advance in AXIS it respects (cars instead of wheat)

Straight line shift

Indicates resources are equally efficient at producing both goods shown on the PPF axes- opportunity cost is constant.