Use a ppf to explain the trade-offs that all economies face, Microeconomics

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Use a PPF to explain the trade-offs that all economies face.

All countries must construct some sort of system whereby output, allocation and distribution of goods is decided. In the method, of solving the basic economic problem there will always be a trade-off (i.e. an opportunity cost) as resources are limited and our (societal) needs are infinite. This trade-off can be illustrated diagrammatically by the PPF

 


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