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LESSON 2.2 Production Possibilities Frontier PowerPoint Presentation
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LESSON 2.2 Production Possibilities Frontier

LESSON 2.2 Production Possibilities Frontier

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LESSON 2.2 Production Possibilities Frontier

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  1. Objectives LESSON 2.2Production Possibilities Frontier Describe the production possibilities frontier and explain its shape. Explain what causes the production possibilities frontier to shift. CONTEMPORARY ECONOMICS: LESSON 2.2

  2. Key Terms LESSON 2.2Production Possibilities Frontier production possibilities frontier (PPF) efficiency law of increasing opportunity cost economic growth CONTEMPORARY ECONOMICS: LESSON 2.2

  3. Efficiency and Production Possibilities Frontier • Simplifying assumptions • PPF model • Inefficient and unattainable production • Shape of the PPF CONTEMPORARY ECONOMICS: LESSON 2.2

  4. Production Possibilities Frontier • A through Fare attainable • I represents inefficient use of resources • U represents unattainable combinations CONTEMPORARY ECONOMICS: LESSON 2.2

  5. Shifts in the PPF • Changes in resource availability • Increases in stock of capital goods • Technological change • Lessons from the PPF CONTEMPORARY ECONOMICS: LESSON 2.2

  6. Increase in available resources Decrease in available resources Shifts in the PPF CONTEMPORARY ECONOMICS: LESSON 2.2