1) The PPF: Draw a Production Possibilities Frontier (PPF) for the production of two goods, machine tools (a capital good) and d
onuts (a consumer good). Put machine tools on the vertical axis and donuts on the horizontal axis. Briefly explain what the PPF curve represents.
1 answer:
Answer:
The diagram of the Possibilities Frontier (PPF) is shown on the first uploaded image
A Possibilities Frontier (PPF) can also be referred to as the production possibility curve and it can be defined as a curve that denotes the production of two types of goods in an economy at a given period of time in different proportion of combinations
When this curve shift to the right it means that there is technological advancement in that economy
If this curve a points lies within it then the resources are not fully utilized
Explanation:
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