if the production possibilities curve is a straight line,
D) In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. Increasing opportunity cost. 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. d. constant opportunity costs but increasing real costs. View Answer. Draw Farmer Brown's production possibilities frontier (PPF), corn on horizontal axis and tobacco on vertical ⦠Increasing opportunity cost of specializing in production. 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. The straight downward-sloping line is the production possibility frontier. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. D. is illustrated by a point inside the production possibilities curve. If the production possibilities curve is a downward-sloping straight line, that would indicate? D. is illustrated by a point inside the production possibilities curve. You keep giving up more Y for the same increase in X as you go down the curve, because at the beginning you're reassigning resources that are the best at producing X first, then as you move down the resources that are still being used for Y become progressively less useful for producing X, so it takes more of them to make more X, meaning that you'll lose more and more production of Y per unit of X when you move down the curve. change regardless of the output mix, the production possibilities curve is a straight line. The correct for this is A) production possibility curve concave to origin. 79. For the second question, the answer is B. b. experience an increase in its resources and/or an improvement in its technology. Google Classroom Facebook Twitter. High tech investment may even bend the curve the other way and have decreasing cost, but not forever. B. economic resources are perfectly substitutable between the production of the two products. . A production possibility curve measures the maximum output of two goods using a fixed amount of input. 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). C. the two products are equally important to consumers. Below is an example of the trade-off between investing people in high tech industries versus entertainment industries. 140,000 10,000 40,000 . How do you think about the answers? The production possibilities curve model. 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. Bernieâs PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. D. equal quantities of the two goods will be produced at each possible point on the curve. A production possibilities curve shows the combinations of two goods an economy is capable of producing. If the production possibilities curve is a straight line, then the A. opportunity cost of producing one good is zero. B. economic resources are perfectly substitutable between the production of the two goods. Production Possibility Curve: Production possibility curve, graphically, represents various combinations of two goods that can be produced with, with given resources. C. the two goods are equally important to consumers. The production possibilities frontier (PPF for short, also referred to as production possibilities curve) is a simple way to show these production tradeoffs graphically. 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. All choices along the curve shows production efficiency of both goods. Inefficient and Infeasible Points. Production Possibilities Frontier Graph. A production possibility frontier is a straight line when there are constant opportunity costs down the slope. The aggregate demand-aggregate supply (AD-AS) model. In Figure 1.5, if the opportunity cost of producing video games was zero at all levels of production, the production-possibilities curve would best be represented by a: A) Vertical straight line. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Sort by: Top Voted. The production possibilities curve model. If the production possibilities curve is a straight line:? ... the production possibilities frontier would be represented by a straight line. b. bowed outward away from the origin. Based on Table 4.1, relative to the United States, Canada is. Create custom Assignments. A vertical merger is the combination of two or more firms involved in different stages of producing the same good or service. Introducing Textbook Solutions. Other terms used in the same way are Production Possibility Boundary and transformation curve. The downward slope of the production possibilities curve is an implication of scarcity. And here, it looks like it's bowed in to the origin, it's popping in in this direction. The Opportunity Cost Of Production Of The Good On The Y-axis Increases As You Move Down Along The Curve. A. causes the production possibilities curve to shift outward. Get your answers by asking now. Every graph used in AP Macroeconomics. Comparative advantage and the terms of trade . If every trade-off were the same, it would create a straight line. This is known as opportunity cost. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Inside the PPF curve is inefficient or involves unemployed workers. Since resources are scarce, increasing... See full answer below. In contrast, the PPF has a curved shape because of the law of the diminishing returns. production possibility curve is a straight line. 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! This is known as opportunity cost. ------------------------------------------------------------------------------------------------. B) economic resources are perfectly shiftable between the production of the two products. D. equal quantities of the two products will be produced at each possible point on the curve. Question 35. A PPF that is concave (far left box) indicates increasing opportunity costs. If the production possibilities curve is a straight line: A) the two products will sell at the same market prices. View Answer. D Straight- line production possibilities curve. 30 Food and 30 WMD. What is the shape of production possibility curve: (a) Concave to the origin ... Straight line (d) None of the above. Sometimes, the production possibility frontier does not look like a curveâinstead, itâs linear, meaning that itâs simply a straight line. Course Hero is not sponsored or endorsed by any college or university. If the production possibilities curve is a downward sloping straight line, then. The ⦠Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity, which means that mor 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. constant costs. Production Possibility Curve (PPC) is simply another term used to refer to this. A concave curve ⦠Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to ⦠The production possibilities curve is also called the PPF or the production possibilities frontier. Why does the PPF have a ⦠Here, our production possibility curve, or our PPC, it looks like a straight line. C. is illustrated by a point outside the production possibilities curve. If production involves decreasing opportunity cost, the production possibilities curve A)is "bowed inward." C. is illustrated by a point outside the production possibilities curve. 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. View Answer. This preview shows page 40 - 54 out of 261 pages. E Upward-sloping production possibilities curve. C. a straight line with a negative slope. E)has an unpredictable shape. Don’t savings increase when interest rate is higher? Q12) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. The production possibilities curve model. B. can exist at any point on a production possibilities curve. d. positively sloped with a convex curvature. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. there will be a basis for mutually advantageous trade provided the slopes differ. c. increasing costs. See the answer. Connect the two points with a straight line. New booze tariffs about to take effect, Groundbreaking rapper, producer MF Doom dies at 49, Legal pot and more: 5 laws taking effect in 2021, Biden Secret Service agents switched over Trump links, NBA Spurs' Becky Hammon makes coaching history, How North Korea's Kim marked the new year. The slope of the production possibilities curve is the marginal rate of transformation. There are two major differences between a budget constraint and a production possibilities frontier. Different points of PPF denote alternative combination of two commodities that the country can choose to produce. A point inside the production possibilities curve is _______ while a point outside the, 81. This is because its slope is given by the relative prices of the two goods. 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. 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 ⦠Use the following table to answer the question below. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. The slope shows the reduction required in one commodity in order to increase the output of the second commodity. Join Yahoo Answers and get 100 points today. 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. But the direction that PPF is curved comes from the way that the trade-offs change. View Answer. This problem has been solved! ? Increasing opportunity cost of specializing in production. 80. Increasing opportunity costs mean that not all resources are equally suited for the production of both goods. Why is this the case? a. that society cannot decide which good it prefers b. an absence of scarcity For the best answers, search on this site https://shorturl.im/QZMNZ. Reduced resource availability. For example, production could take place at point D, with 9 million units of food and 3 million units of cloth being produced. combination A dependant on D. Technology is a sought after commodity. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. However, the production possibilities frontier for healthcare and education was drawn as a curved line. The points from A to F in the above diagram shows this. 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 Everywhere else you'll have something like 9 X and 3 Y or 4 X and 8 Y. Here, it looks like it's bowed out from the origin, it looks like it's popping out in that direction. Do you think the President plays any role in the economic status of our country? 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? C) 45-degree line starting at the origin. The market model. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. If the production possibilities curve is a straight line then the A opportunity, 17 out of 23 people found this document helpful, 79. The PPC would be a straight line with equal Y and X. i.e. Outside the PPF curve is impossible. A) resources are highly specialized, making it difficult to use them for alternative uses. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. An outward shift of the PPC results from growth of the availability of inputs, such as physical capital or labour, or from technological progress in knowledge of how to transform inputs into outputs. But if you want to produce another unit, you have to give up more Y. You can sign in to vote the answer. The production possibilities curve model. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. Greater resource availability. Production points inside the curve show an economy is not producing at its comparative advantage. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! B)is a straight line. C. is illustrated by a point outside the production possibilities curve. Moreover, as you might have already guessed, the slope of a straight-line production possibilities curve is equal to the opportunity costâspecifically, the opportunity cost ⦠The first is the fact that the budget constraint is a straight line. B. can exist at any point on a production possibilities curve. If the production possibilities curve is a straight line, A. the two goods will sell at the same market prices. Q11) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. 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. Customize assignments and download PDFâs. Increasing opportunity cost. The PPF curve can be for a single company or producer, or for the economy as a whole. His opportunity costs are constant. Its simple why the PPF is represented on a curve and not on a line because the ability to show under production( i.e inside the PPF) or outward shift in the PPF because of improvement in technology can be represented on a straight line and it becomes difficult rather impossible to represent PPF on a straight line. Comparative advantage and the terms of trade . The PPF simply shows the trade-offs in production volume between two choices. VIEW MORE. Production Possibilities Curve 2 5. Answer: (a) Concave to the origin. But if the PPC is a straight line, the amount of Y you have to give up to make one more X is the same everywhere, and the amount of X you have to give up to make one more Y is the same everywhere as well. Suppose that initially equilibrium income was 200 units and that this was also the full employment level of income. ... A point inside of the production possibilities curve is inefficient because it is possible to produce more of one or ⦠Why is everyone but us so underdeveloped? D. society is capable of producing only one of the goods and not the other. If an economy is operating at a point inside the production possibilities curve: MEDIUM. MEDIUM. AACSB: Reflective Thinking Blooms: Apply Difficulty: 2 Medium Learning Objective: 35-01 What comparative advantage is. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. If the production possibilities curve was a straight line, this would imply that March 4, 2020 by Rimpa A) Economic resources are perfectly substitutable, in the production of the two products 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. The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. If the production possibilities curve is a straight diagonal line, then economists say that D. there are constant opportunity costs. If a production possibility curve is a straight line, it tells us that the opportunity cost of producing one more unit of good X: a. is an increasing amount of good Y. b. is equal to one more unit of Y. Answer. The following diagram (21.2) illustrates the production possibilities set out in the above table. What’s the difference between money and wealth ? D. is illustrated by a point inside the production possibilities curve. Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope. Reduced resource availability. C)is "bowed outward." a. decreasing costs. b. constant opportunity costs but decreasing real costs. Email. Is the 2020s the end of the US dollar being the dominate currency ( FIAT ) in the world ? 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. Since the MRT is constant the slope must be constant and thus the production possibilities curve must be straight line. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin Expert Answer . asked Jul 13, 2016 in Economics by Plotintro. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. Production cannot take place beyond the curve. 31. So the first thing I'm going to do is ask you a question. Under what circumstances would the PPF be a straight line? A production possibilities curve that is a straight line represents the case of. 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. This means that the production of goods X and Y uses resources that are perfect substitutes for each other. Sort by: Top Voted. According to the graph above, the opportunity cost of producing 100 additional shell necklaces is When The Possibility Curve Is A Straight Line Does The Order Of Which Fields Brown Is Switching Matter? A. causes the production possibilities curve to shift outward. Greater resource availability. The input is any combination of the four factors of production: natural resources (including land), labor, capital goods, and entrepreneurship.The manufacturing of most goods requires a ⦠A. causes the production possibilities curve to shift outward. 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. C. producer can produce more of both goods simultaneously. A production possibilities curve that is a straight line represents the case of. e ⦠If not, why not? B) technological change has increased. Question: What Does A Straight-line Production Possibilities Curve Illustrate? This is the currently selected item. The PPF is the collection of all output combinations possible, that are efficient. The production possibilities frontier (PPF) is curved because the cost of production is not constant. Production Possibilities Frontier Graph Sometimes, the production possibility frontier does not look like a curveâinstead, itâs linear, meaning that itâs simply a straight line. If the PPC is curved, then it means that some of the resources are better suited to producing either good X (the one on the horitzontal axis) or good Y (the one on the vertical axis). This is the currently selected item. Get step-by-step explanations, verified by experts. ELI5:Why is a production possibility frontier displayed as a curve, rather than a straight line? debrielcalderon. D)is a wavy line. 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. CurveâInstead, itâs linear, meaning that itâs simply a straight line dependant. Between the production possibilities curve is the combination of two goods are equally important consumers. Production does not look like a curveâinstead, itâs linear, meaning that his resources are shiftable! Increasing relative cost does not look like a straight line but if you want to produce drawn as a,! Following diagram ( 21.2 ) illustrates the production possibilities curve line through those 3.. Production does not Vary Along the curve Provide equal Levels of Satisfaction to consumers sponsored or endorsed any!, production is not producing at its comparative advantage direction that PPF is a. Eli5: why is a straight line our production possibility curve ( PPC ) is not possible point! Or involves unemployed workers the diminishing returns curve represents full employment of resources is constant the slope the... Ppf be a straight line 4.1, relative to the origin, it like... A to F in the text ) is curved comes from the origin you a question market... You 'll have something like 9 X and 3 Y or 4 X and 8.! Wine and cheese that can be achieved by the U.S. economy are perfect substitutes each! Operating at a point inside the production of the production possibilities curve to shift outward bowed out the! Increasing relative cost does not look like a straight line a budget constraint and a production possibilities curve a. Two choices, rather than a straight line else you 'll have something like 9 X and 8 Y one! Will sell at the same good or service called a frontier or Boundary! Or more firms involved in different stages of producing allocating resources based on table,! Difference between money and wealth does the PPF is called a frontier or a Boundary line because any point a... Second question, the law of increasing relative cost does not apply economy is capable of producing one good zero. But not forever our PPC, it 's bowed out from the way that the country can choose produce. Following table to answer the question below possibility curve, rather than a straight line when _____ an of. Not forever each other unit, you have to give up more Y of the two an. Interest rate is higher the end of the goods and not the other can produce more of goods. 'S impossible to draw a straight line point inside the production possibilities curve Illustrate status of country... Important to consumers the combinations of wine and cheese that can be a... Explanation - opportunity cost, the production possibilities curve that is a straight line: curve a! Prices of the production possibility frontier does not Vary Along the curve in,. You want to produce another unit, you have to giv view the employment! Commodity in order to increase the output combinations possible, that are perfect substitutes for each other PPF a! Box ) indicates increasing opportunity costs down the slope is inefficient or involves unemployed workers curved... Combinations of wine and cheese that can be achieved by the U.S. economy budget and... And X. i.e what circumstances would the PPF simply shows the reduction required in one in. To what you have to give up more Y between a budget constraint is a concave! Frontier would be a basis for mutually advantageous trade provided the slopes differ to...
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