1.2 PPF/PPC

short and long term economic growth and efficiency

points on curve: efficient combinations of output

points inside curve: inefficient, not used to full productive potential

points outside curve: unattainable, not enough resources

Original curve assumption:

• fixed amount of resources are used

• constant state of technology

Economic growth: outward shift, to the right

Movements along PPF:

• same number & state of resources

Shifts of PPF:

• increase in quantity/quality of resources → the productive potential of the economy increases (economic growth)

(include example from practice questions)