Production Possibility Frontier - PPF

What Does Production Possibility Frontier - PPF Mean? A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.). The PPF assumes that all inputs are used efficiently.

As indicated on the chart above, points A, B and C represent the points at which production of Good A and Good B is most efficient. Point X demonstrates the point at which resources are not being used efficiently in the production of both goods; point Y demonstrates an output that is not attainable with the given inputs.

Ceteris Paribus
What Does Ceteris Paribus Mean? Latin phrase that translates approximately to "holding other things constant" and is usually rendered in English as "all other things being equal". In economics and finance, the term is used as a shorthand for indicating the effect of one economic variable on another, holding constant all other variables that may affect the second variable.

Investopedia explains Ceteris Paribus For example, when discussing the laws of supply and demand, one could say that if demand for a given product outweighs supply, ceteris paribus, prices will rise. Here, the

use of "ceteris paribus" is simply saying that as long as all other factors that could affect the outcome (such as the existence of a substitute product) remain constant, prices will increase in this situation. Contrasts with "mutatis mutandis". Read more: http://www.investopedia.com/terms/c/ceterisparibus.asp#ixzz1YCGdLuDC