It is easy to see that, being at point A corresponding to cars and 30, gallons of milk , the economy can move up to point B more milk , to the right to point C more cars , or have more milk and more cars at the same time point D.
A team consisting of three people is working on a big project, which involves manual entry of data in a computer, with subsequent processing of these data and making a poster presentation.
Naturally, each member of the team has different abilities in performing either task. Adam can make 1 poster or data entries in a day. Hard-working Becci can make 2 posters or data entries in a day. Artistic Cliff can make 3 posters or entries in a day. Originally, the entire team each of them having their own personal computer starts with entering data.
How many entries will be made in a day? As the time comes to start making posters, you decide to assign one member of the team to this task. Whom would you choose? Explain why. Share 0. Select a course. My Profile. My Profile [view full profile]. Inform you about time table of exam. Inform you about new question papers. New video tutorials information. Publications Pages Publications Pages. Recently viewed 0 Save Search.
Your current browser may not support copying via this button. Subscriber sign in You could not be signed in, please check and try again. Username Please enter your Username. Password Please enter your Password. Forgot password? Don't have an account? Sign in via your Institution. State its economic value in the context of production possibilities frontier. In Graph 1, what is the relationship between slope and opportunity cost?
The Production Possibilities Curve PPC is a model that captures scarcity and the opportunity costs of choices when faced with the possibility of producing two goods or services. The bowed out shape of the PPC in Figure 1 indicates that there are increasing opportunity costs of production. Section 3 Chapter 1, Section 3 A production possibilities frontier represents an economy working at its most efficient level. Sometimes an economy works inefficiently and it uses fewer resources than it is capable of using.
This is known as underutilization. A production possibilities curve shows the combinations of two goods an economy is capable of producing. The downward slope of the production possibilities curve is an implication of scarcity. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. And as you increase the production of one item, it lowers production of the other.
But a straight line and downward sloping curve misrepresent a very important concept that goes along with production possibilities!
0コメント