1.03 Production Possibilities Curve
Shifts in the PPC
Change in quantity or quality of resources Change in technology Specialization and Trade -> allowing countries to consume beyond their own production possibilities and get products at a lower opportunity cost than if they produced it themselves
Being efficient vs inefficient on the PPC
Efficient : on the curve Inefficient : inside the curve
Linear PPC vs Parabola like PCC
Linear : constant opportunity cost Parabola : increasing opportunity cost
Economic Growth
changes in the total output of a nation over time as a result of increased production, income, and wealth
Trade-off
the act of giving up one thing to have another thing
Production Possibilities Curve (PPC)
the graphical representation of the combinations of two goods and or services that can be produced by an economy using resources efficiently
Production Possibilities Frontier (PPF)
the graphical representation of the combinations of two goods and services that can be produced by an economy when using resources efficiently
Inefficiency
the waste that stems from the unproductive use of resources