production possibilities curve. Analyze the significance of different locations on, above and below a production possibilities curve. 7. 4. 2 A is the correct answer. To answer this question, the price of the product and the cost of the input must be known. 8. If the economy characterized this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of its available resources? Introduces the production possibilities curve (PPC), sometimes called the production possibilities frontier (PPF), and how it illustrates scarcity, tradeoffs, and opportunity cost. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. Any point on this curve is the maximum possible output when all available resources are fully He has over twenty years experience as … 1.Economic Problem Problem of choice or a problem of allocation of resources is the major economic problem which arises due to scarce resources and alternative uses of resources. ... Answer: See Exhibit 8. Suppose an economy produces only two types of goods, agricultural goods and manufactured goods. ppc and oc Draw a PPC demonstrating what a point on, inside and outside of the curve represents. Production possibility curve in A Real Life Example of Production possibility curve. As you can see, the production possibility curve is a straight line, so opportunity cost is constant and independent of the level of production … 1. The question is broad, but I believe there is plenty of literature that defines this concept in similarly broad terms. Production Possibility Curve By converting the schedule into a diagram, we can get the PP curve. At the beginning of world war II, the U.S. moved from the interior of their production possibility frontier to the boundary. Write the correct answer on the answer blanks, or underline the correct answer in parentheses. Production Possibility Frontiers (Curves, Boundaries) – The Basics A production possibility frontier (PPF) shows the maximum amount of goods and services which an economy can produce with its existing resources at existing factor productivity. Production Possibility Curve. As already mentioned, the most profitable level of production is found in Zone II. Suppose massive new sources of oil and coal are found within the economy and there are major technological innovations in both sectors of the economy. The student did not earn the second point in part (b) because the response does not correctly show a rightward shift of the supply curve. Questions you should be able to answer after the lesson. 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 … Examiners like testing the relationship between the shape of a PPF and the concept of opportunity cost. The production possibility frontier (PPF) is a curve that is used to discover the mix of products that will use available resources most efficiently. What is the opportunity cost … Production Possibilities Curve 1 Production Possibilities Curve Answers Directions: Use the information in FIGURE 1 PPC to answer the following questions about the Alpha economy. In the graph above, this is represented by a move from point A to point B. 6. Explain the difference between a bowed out PPC and a straight line PPC. In this list, only shelter is a human need. Use the PPF below to answer the following questions. We normally draw a PPF on a diagram as concave to the origin. 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