PPC Flashcards

Front

Define production possibility curve (PPC).

Back

A production possibility curve (PPC) is an economic model that shows the maximum possible production of two goods or services that can be achieved using all available resources.

Front

What do the axes on a typical PPC diagram usually represent?

Back

The axes on a typical PPC diagram usually represent capital goods and consumer goods.

Front

True or False?

Any point inside the PPC represents productive efficiency.

Back

False.

Any point inside the PPC represents inefficiency, while points on the curve represent productive efficiency.

Front

Define a movement along a Production Possibility Curve (PPC).

Back

A movement along a Production Possibility Curve (PPC) refers to a change in the allocation of existing resources within an economy, such as moving from one combination of goods to another on the curve.

Front

A movement along the PPC occurs when there is a change in the                   of existing resources within an economy.

Back

A movement along the PPC occurs when there is a change in the allocation of existing resources within an economy.

Front

Define a shift of a Production Possibility Curve (PPC).

Back

A shift of a Production Possibility Curve (PPC) occurs when the entire curve moves outward or inward, representing a change in the economy's productive potential.

Front

What causes an outward shift of the PPC?

Back

An outward shift of the PPC is caused by an increase in the quality or quantity of the factors of production, such as improvements in education or increased migration.

Front

An example of increasing the        of a factor of production is through training and education of labour.

Back

An example of increasing the quality of a factor of production is through training and education of labour.

Front

True or False?

An inward shift of the PPC always indicates economic growth.

Back

False.

An inward shift of the PPC indicates economic decline, not growth.

Front

The Japanese tsunami of 2011 is an example of an event that caused the PPC to shift         , resulting in economic       .

Back

The Japanese tsunami of 2011 is an example of an event that caused the PPC to shift inward, resulting in economic decline.