1. Production Possibility Frontier
The PPF is a curve showing the maximum combinations of goods or services that can be produced in a given period with available resources
Cakes

2. Production Possibility Frontier
What idea is the curve representing?
Cakes

3. Production Possibility Frontier
The curve represents the idea that if the producer chooses to produce more of one good, then the producer simultaneously chooses to produce less of the other good.
Cakes

4. Production Possibility Frontier
If the baker is currently producing at point A but finds demand for cakes goes up and therefore decides to produce 800 cakes, what impact does this have on the production of bread?
Cakes

5. Production Possibility Frontier
If the baker is currently producing at point A but finds demand for cakes goes up and therefore decides to produce 800 cakes, what impact does this have on the production of bread?
Opportunity Cost
Fall of 200 units of bread being produced
Cakes

6. Production Possibility Frontier
Explain what is happening at point ‘D’
Resources are being used inefficiently
Cakes

7. Production Possibility Frontier
Explain what is happening at point ‘C’
There are not enough resources to produce at point ‘C’ – Resources are scarce
Cakes

8. How is the PPF for an economy shown?
The PPF for an economy is drawn on the assumption that all resources in the economy are fully and efficiently employed ?

9. How is the PPF for an economy shown?
The PPF for an economy is drawn on the assumption that all resources in the economy are fully and efficiently employed
If there are unemployed workers or idle factories, or if production is inefficiently organised then an economy cannot produce on its PPF

10. What does a shift of PPF show?
Capital Goods
Economic Growth
PPF0
PPF1
Consumer Goods

11. List at least 3 causes of a shift of PPF
If the economy is producing capital goods, then in the following period its capacity to produce should increase as it will have more resources available for production
Increase in innovation
Increase in employment
Improved management processes

12. May 2013

13. MAY 2013

14. May 2012

15. MAY 2012

16. MAY 2010