| What does a PPF show? | -The Options Available when Considering the Production of 2 Types of Products. |
| What are Trade offs in the Form of PPFs? | -Trade Off is when you have to Choose despite Conflicting Objectives as you can't do All your Objections at the Same Time
-Compromising and doing a little Bit on your Objectives |
| -What are the Points on the PPF called? Why are they not Allocatively Efficient? | -All Resources are used as Efficiently as Possible to make the Maximum Possible Output, if the Point is on the PPF
-But not all Points will reflect Society's Wants and Needs: A Point that makes All Houses and no Guns that is on the PPF may not be want Society wants |
| What are Points INSIDE the PPF Representing? | -Given the Current Level of Resources, you can Produce more of Good X while not cutting back on Good Y
-It is Productively Inefficient |
| What are Points OUTSIDE the PPF Representing? | -Points outside are Unachievable given the Level of Resources in the Economy at that time
-Better, or Extra, Resources must be found. |
| What is Opportunity Cost? | -It's what you give up in order to choose something else. |
| How can the Opportunity Cost and PPF link up? | -Moving along the PPF shows the Opportunity Cost attached from doing so: You Produce more of Good X, but in response the Opportunity Cost is making Less of Good Y |
| Why is Opportunity Cost very Important in Economics Question?
-How do Consumers, Firms and Government use Opp Cost? | -Makes sure a more Efficient Allocation is ensured
-Consumers use this to Choose what to spend their Income on
-Firms use this to see the Profit Forgone by not going down an other Route
-Governments use this to see the Lost Value to the Nation from Policies they didn't Implement |
| What are some Problems with using Opportunity Cost? | -Not all Alternatives is Known
-Sometimes, there are no Alternative Ways or Usages
-Lack of Information on Cost and Alternatives
-Some Factors can be hard to Switch to Alternative Use |
| What can cause the PPF to Shift Outwards? Can the PPF be Vertical or Horizontol? | -If the Amount, or Quality, of Resources Change for the Better
-Increase in the Number of Workers, or more Natural Resources, or Better Technology or Labour Force, will lead to a PPF Outward Shift
-This is because More Output is Produced using the Same Resources
-And it can be Horizontal or Vertical, only if it affects Good X and not Good Y ie Better Quality Resources that concern Good X |
