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