Production Possibilities Graph
- Alternative ways to use resources.
Points
A: Inefficient, under utilization, and attainable
Causes: war, famine, unemployment, and recession
B: Efficient, but producing more guns
C: Efficient, but producing more butter
D: Efficient and attainable
X: Unattainable
Causes: Economic growth, technology, and new resources
Key Assumptions
1) Two goods are produced2) Full employment
3) Fixed resources (land, labor, and capital)
4) Fixed state of technology
5) No international trade
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