What are the 5 lessons contained in the production possibilities frontier?
The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.
What are the two main factors of economic growth according to the production possibility frontier model?
The simplest way to show economic growth is to bundle all goods into two basic categories, consumer and capital goods. An outward shift of a PPF means that an economy has increased its capacity to produce.
What assumptions determine the production possibilities curve?
PPF is the curve that shows the best (maximum) combinations of two outputs that an economy can produce given three assumptions: 1) Technology is fixed; 2) Resources are fixed; and 3) Resources are used at their fullest.
What are the factors that affect economic growth?
5 Factors that Affect the Economic Growth of a Country
- Meaning of Economic Growth:
- Following are some of the important factors that affect the economic growth of a country:
- (a) Human Resource:
- (b) Natural Resources:
- (c) Capital Formation:
- (d) Technological Development:
- (e) Social and Political Factors:
What are the basic sources of economic growth?
Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Either can increase the overall size of the economy but only strong productivity growth can increase per capita GDP and income.
What are the 4 key assumptions of the productions possibilities curve?
The four key assumptions underlying production possibilities analysis are: (1) resources are used to produce one or both of only two goods, (2) the quantities of the resources do not change, (3) technology and production techniques do not change, and (4) resources are used in a technically efficient way.
What does a PPC represent?
Term. Definition. production possibilities curve (PPC) (also called a production possibilities frontier) a graphical model that represents all of the different combinations of two goods that can be produced; the PPC captures scarcity of resources and opportunity costs.
What is slope of PPC?
The slope of production possibility curve is the marginal opportunity cost which refers to the additional sacrifice that an economy makes when it shifts resources and technology from production of one commodity to the other. …
How do you build a strong economy?
While there is much debate about how that can truly be achieved, here are 5 ways which illustrate steps towards economic growth.
- Keeping Manufacturing Units in the Country.
- Free and Fair Trade.
- The Strength of Innovators and Entrepreneurs.
- Crowdfunding; Bringing the Nation Together.