Because factors of production are better at making one type of good compared to the other, as you increase production you use the factors that are less well suited toward producing that good. Opportunity cost therefore increases, making the PPF gradient steeper and therefore concave.
Businesses and consumers follow price signals. If prices go up, more businesses will supply the product. Consumers buy from those with the lowest price and best quality.
The PPF shifts outwards (both axes).
Any event which increases the factors of production or increases the efficiency of the factors of production. e.g. more immigration, new technology that affects both industries
A box
The benefits foregone of the next best alternative.
Enterprise means people are seeking out profitable opportunities for production and taking risks in attempting to exploit these. They are matching resources to each other in a profitable way.
Any of these:
-Poor investment in Research and Development (Innovation)
-Poor transport infrastructure
-Outdated management practices
-Education system that is not preparing people to be effective workers.
-Financial system that does not give money to new firms.
-Markets that are dominated by large firms that don’t let in new firms.
Land refers to the space that is used for buildings, as well as any primary materials that may be extracted from nature
