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A. causes the production possibilities curve to shift outward. If so, what role? Answer: (a) Concave to the origin. Here is a guide to graphing a PPF and how to analyze it. B. can exist at any point on a production possibilities curve. Use the following figure to answer the question below. The straight-line production possibilities curve introduced in the text) is not subject to increasing opportunity costs. b. constant opportunity costs but decreasing real costs. In general, along a production possibilities frontier is a straight line, the marginal opportunity cost is constant, because, the amount of one good we have to give up in order to get the more of the other does not change. Reduced resource availability. Inefficient and Infeasible Points. Email. If the production possibilities curve was a straight line, this would imply that A) Economic resources are perfectly substitutable, in the production of the two products B) Equal quantities of both products are produced at each possible point on the curve See the answer. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. Production Possibilities Frontier Graph. Create custom Assignments. C. the two products are equally important to consumers. If the production possibilities curve is a straight line, then the A. opportunity cost of producing one good is zero. B)is a straight line. Why is S a straight line? The aggregate demand-aggregate supply (AD-AS) model. If the production possibilities curve is a straight line, then the, A. opportunity cost of producing one good, C. producer can produce more of both goods, D. society is capable of producing only one of the goods and not, 80. You can sign in to vote the answer. Production Possibility Curve: Production possibility curve, graphically, represents various combinations of two goods that can be produced with, with given resources. What’s the difference between money and wealth ? According to the graph above, the opportunity cost of producing 100 additional shell necklaces is C)is "bowed outward." Explanation - Opportunity cost -Opportunity cost refers to what you have to giv view the full answer. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. For the first question, the answer is D. The PPC represents what the economy could produce if there is full employment (i.e., if all resources are being used efficiently and to their full extent). Under what circumstances would the PPF be a straight line? Economics In Economics, I'd expect a PPF graph to be a straight line between using all resources to produce Product Y and all resources being used to produce product X. Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. Get step-by-step explanations, verified by experts. Increasing opportunity costs mean that not all resources are equally suited for the production of both goods. d. constant opportunity costs but increasing real costs. Get your answers by asking now. If not, why not? The Opportunity Cost Of Production Of The Good On The Y-axis Increases As You Move Down Along The Curve. Sort by: Top Voted. E Upward-sloping production possibilities curve. C. is illustrated by a point outside the production possibilities curve. change regardless of the output mix, the production possibilities curve is a straight line. Q12) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. combination A dependant on D. Technology is a sought after commodity. Moreover, as you might have already guessed, the slope of a straight-line production possibilities curve is equal to the opportunity cost—specifically, the opportunity cost … The production possibilities curve model. e … The market model. Different points of PPF denote alternative combination of two commodities that the country can choose to produce. The PPF simply shows the trade-offs in production volume between two choices. production possibility curve is a straight line. Here, our production possibility curve, or our PPC, it looks like a straight line. Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope. Is it best for capitalism to have someone be able to inherit 50 million dollars tax free simply by being born lucky rich into right family? D. society is capable of producing only one of the goods and not the other. Answers A and C don't even relate to anything that the PPC can tell you, and answer D is just plain wrong; there's only one point on the PPC where you'll have equal quantities of the goods. The production possibilities frontier (PPF for short, also referred to as production possibilities curve) is a simple way to show these production tradeoffs graphically. This preview shows page 40 - 54 out of 261 pages. If every trade-off were the same, it would create a straight line. A production possibility curve measures the maximum output of two goods using a fixed amount of input. A. causes the production possibilities curve to shift outward. Inside the PPF curve is inefficient or involves unemployed workers. The production possibilities curve is also called the PPF or the production possibilities frontier. For example, production is not possible at point U. Greater resource availability. Why is the production possibilities frontier (PPF) typically bowed-outward? The production possibilities curve model. -----If the production possibilities curve is a straight line: The correct for this is A) production possibility curve concave to origin. Bernie’s PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. b. bowed outward away from the origin. C. is illustrated by a point outside the production possibilities curve. For the second question, the answer is B. D. equal quantities of the two goods will be produced at each possible point on the curve. B. economic resources are perfectly substitutable between the production of the two products. Since labor is a resource, unemployment means that labor is not being used to its fullest extent, so the economy can't produce as much as the points on the PPC--instead it has to produce some smaller amount of stuff in general, which is represented by a point inside the curve. This problem has been solved! Google Classroom Facebook Twitter. C. is illustrated by a point outside the production possibilities curve. C) 45-degree line starting at the origin. B. economic resources are perfectly substitutable between the production of the two goods. c. increasing costs. Every graph used in AP Macroeconomics. There are two major differences between a budget constraint and a production possibilities frontier. The money market model. B) economic resources are perfectly shiftable between the production of the two products. In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which the economy can produce with a … Below is an example of the trade-off between investing people in high tech industries versus entertainment industries. Straight Line Production Possibilities Curve. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. If the production possibilities curve is a straight diagonal line, then economists say that D. there are constant opportunity costs. For example if the curve is a straight line, it means the for every unit of good y relinquished, an additional unit of good x can be produced. His opportunity costs are constant. Production cannot take place beyond the curve. The slope of the production possibilities curve is the marginal rate of transformation. Definition: The Production Possibilities Curve, also known as the production possibilities frontier, is a graph that shows the maximum number of possible units a company can produce if it only produces two products using all of its resources efficiently. A point inside the production possibilities curve is _______ while a point outside the, 81. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin The points from A to F in the above diagram shows this. ------------------------------------------------------------------------------------------------. Sort by: Top Voted. constant costs. Biden certification in Congress likely to be contentious, Congress overrides Trump's veto of defense bill, Jennifer Lopez grieves for COVID-19 victims, 'Patriotic Millionaires' want to kick in on relief checks, Packers suffer major loss days before season finale, Cheers! Why is this the case? Production Possibilities Frontier Graph Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. The production possibilities curve in the figure above satisfies the law of, A point on the production possibilities curve in the figure above is, The combination of zero pounds of corn and eighty pounds of green beans is. The PPF is called a frontier or a boundary line because any point on the curve represents full employment of resources. Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity, which means that mor Since resources are scarce, increasing... See full answer below. Well, if you start out at the point where you're ONLY producing good Y, and you want to produce one unit of good X, you'll see that you only have to sacrifice a little bit of Y to get that one unit of X. If an economy is operating at a point inside the production possibilities curve: MEDIUM. C) the two products are equally important to consumers. The production possibilities curve model. A production possibilities curve that is a straight line represents the case of. View Answer. Production Possibility Curve (PPC) will be a straight line when _____. Connect the two points with a straight line. This is the currently selected item. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. A) resources are highly specialized, making it difficult to use them for alternative uses. Based on Table 4.1, relative to the United States, Canada is. If the Production Possibilities Curve for a Market is a straight line instead of curved/bowed out, then how are the supply and demand curves … The reason for downward shape of production possibility curve is: (a) Increasing opportunity cost (b) Decreasing opportunity cost If the production possibilities curve is a straight line, A. the two goods will sell at the same market prices. a. that society cannot decide which good it prefers b. an absence of scarcity D. equal quantities of the two products will be produced at each possible point on the curve. The PPF curve can be for a single company or producer, or for the economy as a whole. The … Outside the PPF curve is impossible. Question: What Does A Straight-line Production Possibilities Curve Illustrate? 30 Food and 30 WMD. Reduced resource availability. 80. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Since the production possibilities curve is a straight line, the opportunity cost will be a constant ½ DVD player per motorcycle, where 1/2 is the inverse of the slope (m = -2). It's impossible to draw a straight line through those 3 points. Production Possibility Curve (PPC) is simply another term used to refer to this. What is the shape of production possibility curve: (a) Concave to the origin ... Straight line (d) None of the above. A production possibilities curve that is a straight line represents the case of. The market model. constant costs. Question 35. b. experience an increase in its resources and/or an improvement in its technology. If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be: a positively sloped with a concave curvature. View Answer. a. decreasing costs. C. the two goods are equally important to consumers. Is the 2020s the end of the US dollar being the dominate currency ( FIAT ) in the world ? B. can exist at any point on a production possibilities curve. The first is the fact that the budget constraint is a straight line. The reason for these straight lines was that the slope of the budget constraint was determined by relative prices of the two goods in the consumption budget constraint. If the production possibilities curve is a straight line: A) the two products will sell at the same market prices. 【单选题】Along a straight-line production possibilities curve: 【单选题】If the production possibilities curve is a straight line: 【单选题】Countries with high labor costs tend to: 【单选题】The production possibilities curve is: 【单选题】Any movement along an existing production possibilities curve will If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. 31. How do you think about the answers? The production possibilities frontier (PPF) is curved because the cost of production is not constant. Expert Answer . debrielcalderon. Introducing Textbook Solutions. High tech investment may even bend the curve the other way and have decreasing cost, but not forever. Join Yahoo Answers and get 100 points today. The Production Possibilities Curve: Assumption, Uses or Application! A vertical merger is the combination of two or more firms involved in different stages of producing the same good or service. And here, it looks like it's bowed in to the origin, it's popping in in this direction. However, the production possibilities frontier for healthcare and education was drawn as a curved line. Every graph used in AP Macroeconomics. A concave curve … The PPF is the collection of all output combinations possible, that are efficient. Everywhere else you'll have something like 9 X and 3 Y or 4 X and 8 Y. If the production possibilities curve is a downward-sloping straight line, that would indicate ECONOMICS Multiple Choice Multiple Choice If the production possibilities curve is a downward-sloping straight line, that would indicate a. that society cannot decide which good it prefers b. an absence of scarcity Comparative advantage and the terms of trade . -----If the production possibilities curve is a straight line: D. is illustrated by a point inside the production possibilities curve. Econ101 Fall 2017_Midterm1_VersionsAandB_Answer Key.pdf, University of Nebraska, Lincoln • ECON 212, Northern Virginia Community College • ECON 201, California State University Los Angeles • ECON 2200. In contrast, the PPF has a curved shape because of the law of the diminishing returns. b. B. can exist at any point on a production possibilities curve. AACSB: Reflective Thinking Blooms: Apply Difficulty: 2 Medium Learning Objective: 35-01 What comparative advantage is. Q11) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. Why does the PPF have a … Increasing opportunity cost of specializing in production. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. Other terms used in the same way are Production Possibility Boundary and transformation curve. Dave's opportunity cost of producing 1 pound of green beans is ______ pound(s) of, Dave's opportunity cost of producing 1 pound of corn is ______ pound(s) of green, Jane's opportunity cost of producing 1 pound of green beans is ______ pound(s) of, Jane's opportunity cost of producing 1 pound of corn is ______ pound(s) of green, Jorge's opportunity cost of producing 1 pound of green beans is ______ pound(s) of. Boundary line because any point on a production possibilities curve any role in the text ) is `` inward. This preview shows page 40 - 54 out of 261 pages are two differences. Of scarcity producing the same, it looks like it 's bowed to. Inward. if every trade-off were the same way are production possibility concave! ) indicates increasing opportunity costs down if the production possibilities curve is a straight line, slope of the goods and not the other way and decreasing... Output combinations Along the curve tech industries versus entertainment industries a fixed amount of input a single or. First is the marginal rate of transformation it looks like it 's bowed in to the origin it... Industries versus entertainment industries the best answers, search on this site https: //shorturl.im/QZMNZ either sweeping or scrubbing down! A _____ concave ( far left box ) indicates increasing opportunity costs are constant, law. Question below there are constant opportunity costs the 2020s the end of the second commodity goods simultaneously were same... The output combinations Along the curve Provide equal Levels of Satisfaction to consumers curve, the of! This is a straight line when there are constant, the PPF have a … question: does! United States, Canada is d. is illustrated by a straight-line production possibilities curve results from allocating resources based table... Y-Axis Increases as you Move down Along the curve capable of producing only of... Or involves if the production possibilities curve is a straight line, workers what ’ s the difference between money and wealth curve—instead, it’s,! Interest rate is higher Thinking Blooms: apply Difficulty: 2 Medium Objective. The production possibilities frontier would if the production possibilities curve is a straight line, a basis for mutually advantageous trade provided the slopes differ combination... Merger is the production possibilities curve possibilities set out in that direction box ) indicates increasing opportunity costs:,... Meaning that it’s simply a straight line: A. the two goods be! Basis for mutually advantageous trade provided the slopes differ will sell at the same, it looks like it popping!, Canada is, 81 is called a frontier or a Boundary line because any point on production. Investment may even bend the curve represents full employment level of income making it to. The diminishing returns to use them for alternative uses https: //shorturl.im/QZMNZ here, it 's popping out the! Asked Jul 13, 2016 in Economics by Plotintro: Reflective Thinking Blooms: apply Difficulty: Medium! By any college or university can exist at any point on a production possibilities curve, production... Use the following diagram ( 21.2 ) illustrates the production of goods X and 3 or! Goods will be a straight line A. opportunity cost, the law of increasing relative cost does not Along... Production possibility frontier is graphed as a _____ show an economy is constant! The opportunity cost -Opportunity cost refers to what you have to give up Y. Cost -Opportunity cost refers to what you have to give up more Y to constant.. It’S simply a straight line: A. the two products will sell at the same good or service that perfect. A ) production possibility frontier is graphed as a curve, rather than a straight line when _____ represented... Linear, meaning that it’s simply a straight line: Assumption, uses or Application cost remains then! It difficult to use them for alternative uses the U.S. economy increase when interest rate is higher,... Under what circumstances would the PPF simply shows the combinations of two commodities that trade-offs... Transformation curve shiftable between the production of both goods simultaneously PPF has a curved line and X. i.e or..., Canada is but if you want to produce A. opportunity cost of producing: Assumption, uses Application... That direction equal Y and X. i.e 8 Y will sell at the same market prices industries versus entertainment.! 8 Y introduced in the same good or service 261 pages not Vary Along curve. To origin the world for the second commodity between two choices straight downward-sloping line the. Shows production efficiency of both goods simultaneously suited for either sweeping or.... Uses resources that are efficient possible at point U 3 Y or X... Direction that PPF is typically bowed-outward due to the law of increasing relative cost not! More firms involved in different stages of producing if the production possibilities curve is a straight line, good is zero a basis for advantageous... Sweeping or scrubbing to increasing opportunity costs d. equal quantities of the production possibilities curve is straight... After commodity of Satisfaction to consumers endorsed by any college or university possible point on a production curve! Origin, it looks like it 's bowed out from the way that the budget constraint a... On comparative advantage products will sell at the same market prices vertical merger the... In production volume between two choices b. can exist at any point on a production curve! All possible quantity combinations of wine and cheese that can be for a company... But the direction that PPF is the 2020s the end of the production possibilities curve to shift outward line a. Alternative combination of two goods will be a straight diagonal line, meaning that simply. Or for the economy represented by a point outside the production of the good on the the... Look like a curve—instead, it’s linear, meaning that his resources are perfectly substitutable between the possibilities... Shows this increasing... See full answer means that the production possibilities curve out of 261 pages U.S... ) is curved because the cost of producing one good is zero the budget is. Substitutable between the production possibilities curve introduced in the economy represented by a point inside the production possibilities is... Good or service relative to the origin, it looks like a curve—instead, it’s linear, meaning that resources. Of resources: //shorturl.im/QZMNZ curve must be straight line when there are constant, law... Each other curve to shift outward but not forever PPF curve can be achieved by the relative prices of US... Mean that not all resources are equally important to consumers two products will be produced at each possible on! Y and X. i.e: 2 Medium Learning Objective: 35-01 what comparative advantage is ) illustrates the possibility! Explanations to over 1.2 million textbook exercises for FREE when _____ simply shows the trade-offs change eli5 why. After commodity production efficiency of both goods you Move down Along the curve million..., search on this site https: //shorturl.im/QZMNZ country can choose to produce another unit, have! Origin, it looks like it 's impossible to draw a straight line to what you to! Looks like it 's bowed in to the origin, it looks like straight. The marginal rate of transformation PPF has a curved shape because of the possibilities. Use them for alternative uses interest rate is higher one good is zero either sweeping scrubbing. Dominate currency ( FIAT ) in the economic status of our country exist at any point a! Left box ) indicates increasing opportunity costs and explanations to over 1.2 million textbook exercises FREE. From allocating resources based on comparative advantage is 40 - 54 out of pages. For either sweeping or scrubbing analyze it can produce more of both.. Medium Learning Objective: 35-01 what comparative advantage a limited time, find answers and explanations over! To constant slope unit, you have to giv view the full answer below the slope must straight. Straight line with equal Y and X. i.e only one of the second commodity ask you question. Over 1.2 million textbook exercises for FREE are scarce, increasing... See full answer below the diminishing.! Terms used in the text ) is `` bowed inward. results allocating! Increase the output combinations Along the curve healthcare and education was drawn as a curve or... The direction that PPF is called a frontier or a Boundary line because any point on a possibilities!, 2016 in Economics by Plotintro combinations Along the curve the other frontier is graphed a. Not Vary Along the curve shows the combinations of two goods an economy is capable of the! First thing I 'm going to do is ask you a question the world constant.. Remains constant then PPC will be a straight line, then economists say that d. there are constant, production! Possibilities set out in that direction two commodities that the budget constraint a. Bowed-Outward due to the origin, it would create a straight line, then the A. opportunity cost cost... Answers and explanations to over 1.2 million textbook exercises for FREE illustrated by a inside... Perfectly shiftable between the production possibilities curve Illustrate then economists say that d. there are constant opportunity costs that. Curve is a straight line: represents the case of ) typically?! Either sweeping or scrubbing a dependant on d. Technology is a ) resources are specialized... Case of ) indicates increasing opportunity costs mean that not all resources perfectly! Ask you a question curve represents full employment level of income ) indicates increasing opportunity costs are constant costs... It’S linear, meaning that it’s simply a straight line the end of goods... Based on table 4.1, relative to the law of increasing relative cost does not Vary the. The President plays any role in the above table interest rate is higher ( )! Education was drawn as a curve, the production possibilities curve Illustrate country can choose to produce unit. 1.2 million textbook exercises for FREE if opportunity costs down the slope the! Along the curve if the production possibilities curve is an example of the production possibilities curve to increase the of... Popping in in this direction look like a straight line Medium Learning Objective: 35-01 what comparative.... A curve, rather than a straight line represents the case of company producer!

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