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When will the production possibility frontier be a straight line?
Wiki User
∙ 13y ago
This occurs when two goods are produced without specialization of resources. Typically there is specialization which leads to the bowed out curve. For example, think of a PPF in which corn and wheat are grown on the same land. Some of this land is going to be better for producing wheat; thus, the wheat is going to take up more and more of the land. But at a certain point, you're going to be using land that will be best used for corn production. So if you use all of the land for wheat (a point either on the x or y axis of the PPF), the opportunity cost measured in corn is going to be greater than the cost of producing all wheat. Remember that the slope of the line is the opportunity cost.
But when there is no specialization, producing all of one good does not incur a greater opportunity cost. Therefore the opportunity cost is constant and the slope is constant.
Wiki User
∙ 13y ago
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Why does the law of diminishing returns require the Production Possibility Frontier to be curved rather than a straight line?
law of diminishing returns implies that as amount of a variable factor say,labor,changes and others remain unchanged in short run,initially the output increases at an increasing rate,then increases at a decreasing rate and finally reaches maximum and falls. this shows that output is not changing linearly hence production possibility frontier cannot be a straight line.
What line that shows different production possibilities for an economy?
production possibilities frontier
What are the features of a normal production possibility curve?
Production Possibility curves can assume different slopes. As far as i know it can be either concave, convex or a straight line. The concave curve would be concave and downward sloping.This is explained by the law of diminishing returns and that factors used are not homogeneous.In this case the Marginal Rate of technical substitution would be rising. The curve would be convex in case of rising productivity and decreasing opportunity cost. Finally it would be a straight line when factors are homogeneous. Hope it was helpfull. Akheel.
If opportunity costs were constant then the production possibilities curve would be what?
A straight line.
Define isocost line?
A line along which the cost of something -- usually a combination of two factors of production -- is constant. Since these are usually drawn for given prices, which are therefore constant along the line, an isocost line is usually a straight line, with slope equal to the ratio of the (factor) prices.
Why does the law of diminishing returns require the Production Possibility Frontier to be curved rather than a straight line?
law of diminishing returns implies that as amount of a variable factor say,labor,changes and others remain unchanged in short run,initially the output increases at an increasing rate,then increases at a decreasing rate and finally reaches maximum and falls. this shows that output is not changing linearly hence production possibility frontier cannot be a straight line.
What line that shows different production possibilities for an economy?
production possibilities frontier
What are the features of a normal production possibility curve?
Production Possibility curves can assume different slopes. As far as i know it can be either concave, convex or a straight line. The concave curve would be concave and downward sloping.This is explained by the law of diminishing returns and that factors used are not homogeneous.In this case the Marginal Rate of technical substitution would be rising. The curve would be convex in case of rising productivity and decreasing opportunity cost. Finally it would be a straight line when factors are homogeneous. Hope it was helpfull. Akheel.
If opportunity costs were constant then the production possibilities curve would be what?
A straight line.
Difference between a straight line frontier?
A straight line is a linear shape with no curves or angles, while a frontier generally refers to a boundary or border between two regions or domains. In economics or finance, a straight line frontier may represent a simplistic model of efficient investment portfolios, whereas a frontier in geography may denote a physical boundary between countries or areas.
What is the difference between straight line production possibility curve and a bowed out production possibility curve?
When a prod poss curve is a straight line, usually it is an exception, this means that as you produce more of one thing you constantly give up the same proportion of another thing as the scenario would be that the factors of production are 100% mobile. With a bowed out prod poss curve, usually called normal, the situation would be that as you produce more of product A you give up alot of B but eventually the rate of substitution begins to decline due to lack in factor efficiency and so the curve becomes less elasstic. Hope this answeres your question. all the best,
What is a basic stitch?
Straight stitch -- I think In production straight line system how to calculate standard allow minut in women's shirts
What if the possibility curve for a two good economy is a straight line?
The goods must make use of inputs in similar proportions.
What is the exact definition of the word frontier?
The definition for "frontier" is as follows: frontier is receding to either (1) a line or border separating two countries or (2) a district near such a line.
Is straight-line depreciation on equipment fixed or variable?
It is considered as fixed overhead cost because it doesn't dependant on level of production
Do line segments have to be straight?
Yes. If it is not straight, then it is not a line.
What was the Production Budget for On the Line?
The Production Budget for On the Line was $10,000,000.
