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Why in a production possibilities frontier model a point inside the frontier is attainable?
Wiki User
∙ 11y ago
A PPF is the locus of points such that all the economy's resources are used to its fullest potential. A PPF is concave to the origin because of the increasing opportunity cost to produce an additional unit of x (on the horizontal axes). A point inside the PPF is attainable because (1) there may be no full employment or (2) inspite of full employment they are used to less potential. On the contrary a point outside the PPF is not attainable because the PPF itself is the locus of the maximum attainable output given resources, the PPF may however expand due to increase in resources or their efficiency.
Wiki User
∙ 11y ago
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A point inside the production possibilities curve is.....?
Attainable, but the economy is inefficient.
What does Production Possibilities Frontier represent?
it represents the boundary between the goods that are attainable and unattainable within an economy. Inside and along the ppf means that goods are attainable and outside the ppf menas the goods are unattainable and it thereby shows scarcity
Under what conditions is the production possibilities frontier linear?
under what conditions an econoy would be operating inside its production possibility frontier?
Why can production take place on or inside the frontier?
This is known as the law of diminishing returns and can occur because factor on the frontier is deemed to be production efficient and production inside frontier.
What does a point inside a production possibilities curve represent?
A point inside a production possibilities curve represents things that can be produced. However, points inside the curve would be less efficient to produce than those points resting directly on the line.
In a production possibilities frontier model a point inside the frontier is?
Attainable.
Where would a point of underutilization appear on a product possibilities graph?
below or to the left of the production possibilities frontier
A point inside the production possibilities curve is.....?
Attainable, but the economy is inefficient.
What does Production Possibilities Frontier represent?
it represents the boundary between the goods that are attainable and unattainable within an economy. Inside and along the ppf means that goods are attainable and outside the ppf menas the goods are unattainable and it thereby shows scarcity
Under what conditions is the production possibilities frontier linear?
under what conditions an econoy would be operating inside its production possibility frontier?
An economy working below its most efficient production levels?
An economy working below its most efficient production levels points inside the production possibilities frontier. This is in the context of a production possibilities curve.
Why can production take place on or inside the frontier?
This is known as the law of diminishing returns and can occur because factor on the frontier is deemed to be production efficient and production inside frontier.
What does a point inside a production possibilities curve represent?
A point inside a production possibilities curve represents things that can be produced. However, points inside the curve would be less efficient to produce than those points resting directly on the line.
A point inside a production possibilities frontier is?
A point inside the PPF means that resources are not being used efficiently. One or more resources (Land, labor, or capital) is being waisted or not used to its potential. More of both goods could be produced than are currently being produced.
Does an economy that is inside its production possibilities curve face any trade-offs?
If there are opportunity cost, then yes my friend, they do.
Where on a production possibilities curve an economy working below its most efficient production levels is shown?
At any point of underutilization/any point inside of the curve
If the economy is inside the production possibilities curve then more output can be produced using existing resources true or false?
That is true :)
