Economic But the direction that PPF is curved comes from the way that the 38. Answer: D Diff: 1 It is important to understand the concept of opportunity costs when interpreting a PPF. The slope of a production possibilities frontier A) has no economic relevance or meaning. D) the possibility of inefficient production. has no economic relevance or meaning. b. attainable, but the economy is inefficient. A. linear B. bowed in C. bowed out D. vertical Answer: C Diff: 2 17. Using all its resources, the United States can … 7) An outward shift of a nation's production possibilities frontier represents _ A____ 8) If society decides it wants more of one good and all resources are fully utilized, then ___C___ A) it is unable to do this unless technology advances. Production Possibilities A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. b. an economy can produce more of one thing only by producing less of something else. Since the production possibilities frontier represents all of the points where all resources are being used efficiently, it must be the case that this economy has to produce fewer guns if it wants to produce more butter, and vice versa The production possibilities frontier shows the ____ combinations of two products that may be produced in a particular time period with available resources. To see this relationship more clearly, examine Figure 2.3 “The Slope of a Production Possibilities Curve”.Suppose Plant 1 is producing 100 pairs of skis and 50 snowboards per month at point B. The production possibilities frontier can illustrate two kinds of efficiency: productive efficiency and allocative efficiency. The slope of the production possibility frontier shows the ideal combinations (there are always more than one) of production. measures the opportunity cost of producing one more unit of a good. Try a smart search to find The slope of a production possibilities frontier A. has noB. Production Possibilities Frontiers Econ 101 Tutorial Dr. Amy McCormick Diduch Microeconomics is, in part, the study of how individuals, businesses and societies make choices in the face of scarcity. Question 6 (1 point) A production possibilities frontier is a straight line (constant slope) when an economy is interdependent and engaged in trade instead of self-sufficient. production possibilities, the traditional stochastic frontier model is adequate. Diff: 2 … The slope of the production possibility frontier illustrates the opportunity cost of producing oil in terms of corn. 10) The slope of a production possibilities frontier A) has no economic relevance or meaning. Julio spends all 8 hours on vegan meals and produces 16 meals. The production possibilities frontier (PPF) is curved because the cost of production is not constant. 7. Suppose the nominal GDP in 2009 was less than the real GDP in 2009. A production possibilities frontier which displays constant opportunity costs is linear. 21) The slope of a production possibilities frontier A) has no economic relevance or meaning. The slope of a production possibilities frontier... is always varying. is always constant. Remember: A PPF (production possibilities frontier) shows the different combinations of goods that can be produced in a certain amount of time given fixed inputs.If any of these factors change, than the PPF will change as well. That is, as we move down along the PPC, the opportunity cost increases. Find an answer to your question 👍 “The bowed shape of the production possibilities frontier can be explained by the fact that ...” in 📗 Business if the answers seem to be not correct or there’s no answer. The negative slope of the production possibilities curve illustrates that a. some resources are always unemployed. B) is always constant. 8. C) is always varying. Production Possibility Frontier While much useful analysis can be conducted with a chart, it is often useful to represent our models graphically. For this segment, the slope of the production possibilities frontier is −1/2, which is Julio’s opportunity cost of web pages. Production Possibility Curve (PPC) is concave to the origin because of the increasing opportunity cost. is Using all its resources, the United States can produce 50 barrels of oil or 100 bushels of corn. (A) It is called the Marginal Rate of Transformation. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. 16. B) is always varying. Figure 2, below, illustrates these ideas using a production possibilities frontier between hea lth care and education. C) is always varying. Increasing opportunity cost is represented by a _____ production possibilities frontier. The slope of the production possibility frontier illustrates the opportunity cost of producing oil in terms of corn. the opportunity cost of production is always the same. D) measures the opportunity cost of producing one more unit of a good. B) is always constant. (B) It shows the opportunity cost of one good in terms of another. a.positive; to produce more of one good means more production of the other b. positive; to produce more of one good means less production of the other c. constant; the tradeoff in production never changes d. negative; to produce more of one good means less production of the other a.positive; to … C) is always varying. However, in practice, firms have different technologies for a variety of reasons. D) measures the opportunity cost of producing one more unit of a good. Suppose the production possibility frontier for guns (X) and butter (Y) is given by {eq}X^2 + 2Y^2 = 900 {/eq}. A Production Possibility Frontier (PPF) is the graphical representation of Figure 2.2a.is the graphical representation of Figure 2.2a. The slope of any production possibilities curve is __________ because __________. a. Graph this frontier. Production Possibility Frontier (PPF or PPC) PPF is the curve that shows the best (maximum) combinations of two outputs that an economy can produce given three assumptions: 1) Technology is fixed; 2) Resources are fixed; and 3) Resources are used at their fullest. Imposing concavity property on production possibilities frontier 195 property can only be imposed locally, i.e., at the observed combinations of outputs, rather than in terms of the parameters of the true PPF that are unknown. Points within the curve show when a country’s resources are not being fully utilised If every trade-off were the same, it would create a straight line. Main Concept. A bowed out production possibilities frontier is most common in production situations. 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