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15 Cards in this Set
- Front
- Back
Explain the diagram |
From the above diagram, resources are reallocated from production of good A to increase production of good B. The MRT increases, marginal increase and opportunity cost increses. This leads to a fall in output produced of good A. This is because resources used to produced good A are not best suited to produced good B. This leads to diminishing returns |
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Explain the linear curve |
From the above diagram, it shows a straight line PPC indicating that the resources used to produce good A are whale suites in producing good B. Therefore the MRT allong the curve is contano and the opportunity cost and marginal costs are also constant when errs resolves are moved from good A. To increase production of good H. This leads constant return |
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Convex curve |
from the above diagram, shows a situation where whenever resources are reallocated from production good A to increase production of good B, the opportunity cost decrease down the curve. An indication that MRT decreases as well as MC, this leads to an increase of returns. This means resources are moved firm where there are less productive to where they are highly productive |
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Def of PPC |
This refers to a curve fact shows a max possible output of two goods that a country can produce with the respect they have at a state of technology |
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What does the PPC of a country depend on |
1) the quantity and quality of resources available including the state of technology |
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How can a country improve PPC |
1) technology 2) quantity and quality of resources |
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How can a country improve PPC |
1) technology 2) quantity and quality of resources |
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What does a point outside the PPC mean |
Any point outside the curve is unattainable. This is because with the technology, quantity and quality of resources, at the moment, a country can’t produce such combination |
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How can a country improve PPC |
1) technology 2) quantity and quality of resources |
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What does a point outside the PPC mean |
Any point outside the curve is unattainable. This is because with the technology, quantity and quality of resources, at the moment, a country can’t produce such combination |
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What do points along the PPC |
Resources are fully employed and a country is producing at its max potential level. These are always Efficient my points of production |
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How can a country improve PPC |
1) technology 2) quantity and quality of resources |
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What does a point outside the PPC mean |
Any point outside the curve is unattainable. This is because with the technology, quantity and quality of resources, at the moment, a country can’t produce such combination |
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What do points along the PPC |
Resources are fully employed and a country is producing at its max potential level. These are always Efficient my points of production |
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What does a point below the PPC mena |
Gh |
