LRAS vs PPC
By Cayli Cheeks
AP Macro - "Habits" Parody on PPC and LRAS
Long Run Aggregate Supply Curve (LRAS)
- Vertical Line
- Located at an output level where all of the goods and services a nation can produce are being produced as efficiently as possible
- At full employment
- Does not change as price level changes
- Developing more resources or better production techniques shifts the curve outward but it remains vertical
- Represents a point on an economy's production possibilities curve
Production Possibilities Curve (PPC)
- Maximum possible combinations of two types of goods an economy can produce when the economy is fully employing all of its resources in a given time period
- Resources are fully employed and are being used in the most efficient way
- All resources are fixed
- Measures the efficiency in which two commodities can be produced together
- Helps managers and leaders decide what mix of commodities are most beneficial
AP Macroeconomics (PPF)(LRAS)