r 2 Topic: Production Possibilities Frontier Skill: Recognition Production Possibilities and Opportunity Cost 4) The production possibilities frontier is A) upward sloping and reflects unlimited choices. B) upward sloping and reflects tradeoffs in choices. C) downward sloping and reflects unlimited choices. D) downward sloping and reflects tradeoffs in choices. Topic: Production Possibilities Frontier Skill: Recognition 1) The production possibilities frontier A) refers
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PRODUCTION POSSIBILITY CURVE. In economics‚ the Production Possibility Curve (PPC) is based under the field of macroeconomics. The production possibility curve (PPC) is also termed as the production possibility frontier (PPF)‚ a production possibility boundary or sometimes called product transformation curve. It is defined as a curve that illustrates the possibility of producing two goods or services within a specified time with all the resources given such as (labour‚ land‚ capital and the technical
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another. C) not possible to produce more of one good without producing less of another good. D) producing a combination of goods. Use the following to answer question 3: 3. (Table: Coffee and Salmon Production Possibilities) Look at the table Coffee and Salmon Production Possibilities. The table shows the maximum amounts of coffee and salmon that Brazil and Alaska can produce if they just produce one good. The opportunity cost of producing 1 unit of coffee for Brazil is: A) 2 salmon.
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1. Introduction to Economics 1. The Economic Problem Wants and Needs A want is a desire for a good or a service. The desire may be to satisfy hunger or thirst‚ avoid heat or cold‚ be cured of illness‚ be amused or entertained‚ or enjoy that latest product of technology. The item involved may not be within the means of the person who wants it. In economics it is assumed that a person’s wants are unlimited. People are assumed to desire an unlimited array of goods and services. A need is
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For example‚ $ 20 spent on a CD could have been used to buy a T-shirt. The monetary cost is $ 20 but the opportunity cost is the T-shirt. Opportunity Cost The concept of opportunity cost can be easily illustrated using a model called the production possibility frontier. - The model is a graph which shows all the combinations of goods and services that can be produced by an economy given the available resources and level of technology. Static Model :This model is called a ‘static
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decided to increase military production? Explain your answer using the concepts of economic efficiency and opportunity costs. The Production Possibilities Frontier is best described as a line demonstrating the maximum level of production of one good for every production level of some other good. It is a graphical device used to illustrate the concepts of scarcity & how it necessitates choice‚ as well as opportunity cost. The PPF demonstrates the presence‚ or possibility of‚ scarcity and the inability
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be considered opportunity costs. Now lets look at Opportunity Cost from the point of production. Opportunity costs may be assessed in the decision-making process of production. If the workers on a farm can produce either one million pounds of wheat or two million pounds of barley‚ then the opportunity cost of producing one pound of wheat is the two pounds of barley forgone (assuming the production possibilities frontier is linear). Firms would make rational decisions by weighing the sacrifices involved
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income tax rates on people with higher incomes f. Instituting laws against driving while intoxicated 4. Imagine a society that produces military goods and consumer goods‚ which we’ll call “guns” and “butter.” a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost‚ explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.
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affect the economy’s production possibility curve (8 marks)? The production possibility curves is a hypothetical representation of the amount of two different goods that can be obtained by shifting resources from the production of one‚ to the production of the other. This essay will take into account the two factors‚ the depletion of the natural resource and the improvement in technology and further analyse what effect they will have on a country’s production possibility curve. Initially‚ the
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ECON 232 Homework (Essay) 10.25.2014 1) A production point beyond the production possibilities frontier represents what? Points outside the frontier are unattainable. These points describe wants that can’t be satisfied. 2) Explain how the production possibilities frontier illustrates scarcity. The production possibilities frontier illustrates scarcity through showing us that if there is a production point beyond the PPF then‚ it is unattainable. Meaning‚ we can’t make
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