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What is the relationship between production possibility frontier and opportunity cost?
An opportunity cost is the alternative choices that can be made with the allocation of scarce resources. A production possibility frontier is a graph illustrating those opportunities and comparing their results.
Would the production-possibility frontier look different in a command economy?
The production-possibility frontier would not look different in a command economy compared to a market economy because the PPF equate the rates of production between two goods which both use equal factors of production.
Would the production possibility frontier look different in a command economy?
The production-possibility frontier would not look different in a command economy compared to a market economy because the PPF equate the rates of production between two goods which both use equal factors of production.
Illustrate on Production Possibility Frontier diagram if the economy experiences a technological boom?
In economics, the production possibility frontier (the PPF, also called the production possibilities curve (PPC) or the "transformation curve") is a graph that depicts the trade-off between any two items produced. It indicates the opportunity cost of increasing one item's production in terms of the units of the other forgone. ( hope you can build on this) -- BY ASMA In economics, the production possibility frontier (the PPF, also called the production possibilities curve (PPC) or the "transformation curve") is a graph that depicts the trade-off between any two items produced. It indicates the opportunity cost of increasing one item's production in terms of the units of the other forgone. ( hope you can build on this) -- BY ASMA
Why does the production possibility frontier has negative slope?
The production possibility frontier (PPF) has a negative slope because it illustrates the trade-offs between two goods or services that an economy can produce with limited resources. As production of one good increases, resources must be reallocated from the production of the other good, leading to a decrease in its output. This reflects the principle of opportunity cost, where producing more of one item comes at the expense of producing less of another. Thus, the negative slope signifies the inverse relationship between the quantities of two goods produced.
How production possibility frontier provide an insight into the issue of scarcity and choice which an economy faces when deciding what goods and services to produce?
Since resources are limited,the society cannot get all the goods and services the people want.And hence some mechanisms are used to guide the use of resources in the production of goods and services to satisfy as many as people wants as possible. When the society do not know what to produce,the Production Possibility Frontier [PPF] is used to represent a boundary between those combination of goods and services which can be produced and those which cannot be produced.
What are the assumptions behind production possibility frontier?
1) an economy's resources are fixed in both quantity and quality 2) the state of technology is constant 3) That 2 types of goods are produced 4) that the resources are completely mobile between the production of both goods hope that helps
What does the production possibilities curve describes?
The production possibility curve is an analytical tool that is u to explain,analyse and justify the problem as regards the choices in the allocation of productive resources to achieve a given level of output in an hypothetical way. It is based on a short run period is production where some factors are held constant and the otthers can be varied to achieve a given level of output. The production possibility curve explains the rate of transformation between commodity (x and y) when the level of productive resources is given.the slope of the curve is concave to the origin and it touches both axis. The production possibility curve is also called production frontier or production boundary.
What is a production possibility frontier curve?
Basically the PPC represents the hypothetical amount of two different goods that could be obtained by using resources from the production of one for the production of the other. It also describes society's choice between two different goods. When a point is on the curve it means all the resources for those goods is at full employment, anything under the curve is at under-employment, and anything beyond the curve indicates potential growth.
The ppf is a straight line as aresult of?
A Production Possibility Frontier (PPF) is a straight line when the opportunity cost of producing one good over another remains constant. This typically occurs when the resources used in production are perfectly adaptable to both goods, meaning that shifting resources from one product to another does not change the efficiency of their production. In such cases, the trade-offs between the two goods are linear, reflecting a consistent rate of substitution.
Under what conditions is the production possibilities frontier linear rather than bowed out?
When the Opportunity Cost or the tradeoff between the two goods is always at a constant rate.
What do you suppose determines the shape and position of the frontier?
The shape and position of the frontier are determined by the interactions between buyers and sellers in the market. Factors such as consumer preferences, production costs, competition, and government regulations can all influence the frontier. Additionally, technological advancements, changes in resource availability, and shifts in global trade patterns can also impact the shape and position of the frontier.
