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A PPF shows us the Opportunity Cost if producing 1 good or service in return for losing another

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They can show if resources are being used effectively. If they are Producing inside the PPF resources are not being used effectively.

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It shows how effectively resources can be used to make 2 compared goods/types of goods. Each of these goods is assigned to an axis. The curve contains the points where all resources are used to their maximums, including labor, meaning full employment. If shows the quantity of how many of one good must be given up to produce more of the other good. You can see this by comparing 2 points on the curve. If apples are on the x axis, and bananas are on the y axis, and the 2 points are (10, 20) and (40, 10), then we see we can produce 30 more apples in this economy if we choose to produce 10 less bananas. This is the opportunity cost. Points under the curve show inefficiency, and points beyond are not possible to reach for long periods of time.

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12y ago
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13y ago

I'm not in econ, but it sounds like it implies how fast something can be made, dending on how steep it is, or the slope.

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Q: What does the slope of the Production-possibility frontier imply?
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