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    Ch1 and 2 - Part 3

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    Paul

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    © All Rights Reserved
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    Ch1 and 2 - Part 3

    Uploaded by

    Paul
    17 views6 pages

    Original Title

    Ch1 and 2 - part 3-b970ebc3bf82321a1a3afc4929e0a267

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    Copyright:

    © All Rights Reserved
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    Download as pptx, pdf, or txt
    17 views6 pages

    Ch1 and 2 - Part 3

    Uploaded by

    Paul

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    The Production Possibilities

    Frontier (PPF)
    • PPF is a model that shows the combinations
    of output that an economy can possibly
    produce, given the available factors of
    production and the available production
    technology.

    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e


    1
    Efficient and Feasible Points

    Not
    Feasible
    Good Y

    Feasible but All points on the PPF


    are efficient and feasible.
    Inefficient

    Good X
    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
    2
    The Production Possibilities
    Frontier (PPF)
    • PPF is a model that shows the combinations
    of output that an economy can possibly
    produce, given the available factors of
    production and the available production
    technology.

    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e


    3
    Economic Growth: increase in resources,
    or technological advances
    What points represent the
    newly available production
    Good Y

    opportunities as a result of
    economic growth?

    Good X
    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
    4
    Economic Growth: increase in resources,
    or technological advances

    All the points between


    Good Y

    the two PPFs,


    including the points on
    the new PPF, initially
    infeasible, become
    available to the
    economy.

    Good X
    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
    5
    Negative Growth: decrease in
    resources, or technological setbacks
    The economy loses the
    points between the two
    Good Y

    PPFs, including the


    points on the initial
    PPF

    Good X
    ©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
    6

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