C)is "bowed outward." View Answer. Dave's opportunity cost of producing 1 pound of green beans is ______ pound(s) of, Dave's opportunity cost of producing 1 pound of corn is ______ pound(s) of green, Jane's opportunity cost of producing 1 pound of green beans is ______ pound(s) of, Jane's opportunity cost of producing 1 pound of corn is ______ pound(s) of green, Jorge's opportunity cost of producing 1 pound of green beans is ______ pound(s) of. Q12) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. Why does the PPF have a … This is the currently selected item. D. is illustrated by a point inside the production possibilities curve. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. Under what circumstances would the PPF be a straight line? Greater resource availability. Production Possibility Curve (PPC) is simply another term used to refer to this. What is the shape of production possibility curve: (a) Concave to the origin ... Straight line (d) None of the above. ELI5:Why is a production possibility frontier displayed as a curve, rather than a straight line? A vertical merger is the combination of two or more firms involved in different stages of producing the same good or service. The points from A to F in the above diagram shows this. D. is illustrated by a point inside the production possibilities curve. Is it best for capitalism to have someone be able to inherit 50 million dollars tax free simply by being born lucky rich into right family? … a. decreasing costs. Every graph used in AP Macroeconomics. A production possibilities curve shows the combinations of two goods an economy is capable of producing. This is the currently selected item. If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be: a positively sloped with a concave curvature. There are two major differences between a budget constraint and a production possibilities frontier. Create custom Assignments. Use the following figure to answer the question below. C. the two goods are equally important to consumers. a. that society cannot decide which good it prefers b. an absence of scarcity If the production possibilities curve was a straight line, this would imply that March 4, 2020 by Rimpa A) Economic resources are perfectly substitutable, in the production of the two products In Figure 1.5, if the opportunity cost of producing video games was zero at all levels of production, the production-possibilities curve would best be represented by a: A) Vertical straight line. Greater resource availability. D. is illustrated by a point inside the production possibilities curve. D Straight- line production possibilities curve. A production possibility frontier is a straight line when there are constant opportunity costs down the slope. Production Possibilities Frontier Graph Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. D. society is capable of producing only one of the goods and not the other. The downward slope of the production possibilities curve is an implication of scarcity. For the first question, the answer is D. The PPC represents what the economy could produce if there is full employment (i.e., if all resources are being used efficiently and to their full extent). Econ101 Fall 2017_Midterm1_VersionsAandB_Answer Key.pdf, University of Nebraska, Lincoln • ECON 212, Northern Virginia Community College • ECON 201, California State University Los Angeles • ECON 2200. This problem has been solved! How do you think about the answers? A point inside the production possibilities curve is _______ while a point outside the, 81. If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. The slope shows the reduction required in one commodity in order to increase the output of the second commodity. C. is illustrated by a point outside the production possibilities curve. However, the production possibilities frontier for healthcare and education was drawn as a curved line. The Production Possibilities Curve: Assumption, Uses or Application! Suppose that initially equilibrium income was 200 units and that this was also the full employment level of income. Based on Table 4.1, relative to the United States, Canada is. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. debrielcalderon. Use the following table to answer the question below. c. increasing costs. If the Production Possibilities Curve for a Market is a straight line instead of curved/bowed out, then how are the supply and demand curves … Still have questions? This is known as opportunity cost. If an economy is operating at a point inside the production possibilities curve: MEDIUM. Course Hero is not sponsored or endorsed by any college or university. C. is illustrated by a point outside the production possibilities curve. For example, production could take place at point D, with 9 million units of food and 3 million units of cloth being produced. This means that the production of goods X and Y uses resources that are perfect substitutes for each other. The PPF curve can be for a single company or producer, or for the economy as a whole. b. bowed outward away from the origin. A PPF that is concave (far left box) indicates increasing opportunity costs. Reduced resource availability. The PPF is called a frontier or a boundary line because any point on the curve represents full employment of resources. Inside the PPF curve is inefficient or involves unemployed workers. Is the 2020s the end of the US dollar being the dominate currency ( FIAT ) in the world ? If the production possibilities curve is a straight line: A) the two products will sell at the same market prices. If the production possibilities curve is a straight diagonal line, then economists say that D. there are constant opportunity costs. 79. Answers A and C don't even relate to anything that the PPC can tell you, and answer D is just plain wrong; there's only one point on the PPC where you'll have equal quantities of the goods. In general, along a production possibilities frontier is a straight line, the marginal opportunity cost is constant, because, the amount of one good we have to give up in order to get the more of the other does not change. The market model. Google Classroom Facebook Twitter. High tech investment may even bend the curve the other way and have decreasing cost, but not forever. Here, our production possibility curve, or our PPC, it looks like a straight line. The production possibilities curve model. But if the PPC is a straight line, the amount of Y you have to give up to make one more X is the same everywhere, and the amount of X you have to give up to make one more Y is the same everywhere as well. Its simple why the PPF is represented on a curve and not on a line because the ability to show under production( i.e inside the PPF) or outward shift in the PPF because of improvement in technology can be represented on a straight line and it becomes difficult rather impossible to represent PPF on a straight line. ... the production possibilities frontier would be represented by a straight line. If not, why not? For the second question, the answer is B. 140,000 10,000 40,000 . The … C) 45-degree line starting at the origin. The money market model. This preview shows page 40 - 54 out of 261 pages. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. Question 35. The slope of the production possibilities curve is the marginal rate of transformation. If the production possibilities curve is a downward sloping straight line, then. -----If the production possibilities curve is a straight line: Production Possibilities Frontier Graph. The Output Combinations Along The Curve Provide Equal Levels Of Satisfaction To Consumers. A concave curve … View Answer. B)is a straight line. The following diagram (21.2) illustrates the production possibilities set out in the above table. If the production possibilities curve is a straight line, A. the two goods will sell at the same market prices. . Outside the PPF curve is impossible. MEDIUM. there will be a basis for mutually advantageous trade provided the slopes differ. Everywhere else you'll have something like 9 X and 3 Y or 4 X and 8 Y. production possibility curve is a straight line. See the answer. So the first thing I'm going to do is ask you a question. Increasing opportunity cost of specializing in production. This is known as opportunity cost. The production possibilities curve model. constant costs. If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. B. law of constant opportunity costs applies. PPFs are normally drawn as bulging upwards or outwards from the origin, but they can be represented as bulging downward or linear, depending on a number of assumptions. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. 80. If the PPC is curved, then it means that some of the resources are better suited to producing either good X (the one on the horitzontal axis) or good Y (the one on the vertical axis). New booze tariffs about to take effect, Groundbreaking rapper, producer MF Doom dies at 49, Legal pot and more: 5 laws taking effect in 2021, Biden Secret Service agents switched over Trump links, NBA Spurs' Becky Hammon makes coaching history, How North Korea's Kim marked the new year. B. can exist at any point on a production possibilities curve. Combinations of output that are inside the production possibilities … A. causes the production possibilities curve to shift outward. e … The production possibilities frontier (PPF) is curved because the cost of production is not constant. The PPF simply shows the trade-offs in production volume between two choices. C. is illustrated by a point outside the production possibilities curve. Comparative advantage and the terms of trade . Draw Farmer Brown's production possibilities frontier (PPF), corn on horizontal axis and tobacco on vertical … 【单选题】Along a straight-line production possibilities curve: 【单选题】If the production possibilities curve is a straight line: 【单选题】Countries with high labor costs tend to: 【单选题】The production possibilities curve is: 【单选题】Any movement along an existing production possibilities curve will If the production possibilities curve was a straight line, this would imply that A) Economic resources are perfectly substitutable, in the production of the two products B) Equal quantities of both products are produced at each possible point on the curve Straight Line Production Possibilities Curve. B) technological change has increased. Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to … A point or combination that is on the production possibilities curve is, A point outside (to the right of) the production possibilities curve is. -----If the production possibilities curve is a straight line: According to the graph above, the opportunity cost of producing 100 additional shell necklaces is In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which the economy can produce with a … A. causes the production possibilities curve to shift outward. An outward shift of the PPC results from growth of the availability of inputs, such as physical capital or labour, or from technological progress in knowledge of how to transform inputs into outputs. Bernie’s PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Definition: The Production Possibilities Curve, also known as the production possibilities frontier, is a graph that shows the maximum number of possible units a company can produce if it only produces two products using all of its resources efficiently. B. can exist at any point on a production possibilities curve. Increasing opportunity cost of specializing in production. The aggregate demand-aggregate supply (AD-AS) model. Production points inside the curve show an economy is not producing at its comparative advantage. Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. Since resources are scarce, increasing... See full answer below. Different points of PPF denote alternative combination of two commodities that the country can choose to produce. The PPC would be a straight line with equal Y and X. i.e. Since the production possibilities curve is a straight line, the opportunity cost will be a constant ½ DVD player per motorcycle, where 1/2 is the inverse of the slope (m = -2). ? The reason for these straight lines was that the slope of the budget constraint was determined by relative prices of the two goods in the consumption budget constraint. The Opportunity Cost Of Production Of The Good On The Y-axis Increases As You Move Down Along The Curve. Why is this the case? The reason for downward shape of production possibility curve is: (a) Increasing opportunity cost (b) Decreasing opportunity cost Production cannot take place beyond the curve. And here, it looks like it's bowed in to the origin, it's popping in in this direction. constant costs. Other terms used in the same way are Production Possibility Boundary and transformation curve. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. D) In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced. Increasing opportunity cost. This is because its slope is given by the relative prices of the two goods. Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. The Opportunity Cost Of Production Does NOT Vary Along The Curve. The PPF is the collection of all output combinations possible, that are efficient. Production Possibilities Curve 2 5. If the production possibilities curve is a straight line then the A opportunity, 17 out of 23 people found this document helpful, 79. Join Yahoo Answers and get 100 points today. Get step-by-step explanations, verified by experts. For the best answers, search on this site https://shorturl.im/QZMNZ. B) economic resources are perfectly shiftable between the production of the two products. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. ... A point inside of the production possibilities curve is inefficient because it is possible to produce more of one or … Since human wants are unlimited and the means to satisfy them are limited, every society is faced with the fundamental problem of choosing and allocating its scarce resources among alternative uses. B. can exist at any point on a production possibilities curve. B. economic resources are perfectly substitutable between the production of the two products. E)has an unpredictable shape. View Answer. Since labor is a resource, unemployment means that labor is not being used to its fullest extent, so the economy can't produce as much as the points on the PPC--instead it has to produce some smaller amount of stuff in general, which is represented by a point inside the curve. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope. Don’t savings increase when interest rate is higher? C) the two products are equally important to consumers. Since the MRT is constant the slope must be constant and thus the production possibilities curve must be straight line. His opportunity costs are constant. If the production possibilities curve is a straight line, then the, A. opportunity cost of producing one good, C. producer can produce more of both goods, D. society is capable of producing only one of the goods and not, 80. Expert Answer . Here, it looks like it's bowed out from the origin, it looks like it's popping out in that direction. The market model. C. producer can produce more of both goods simultaneously. In contrast, the PPF has a curved shape because of the law of the diminishing returns. A production possibilities curve that is a straight line represents the case of. Production Possibility Curve: Production possibility curve, graphically, represents various combinations of two goods that can be produced with, with given resources. C. the two products are equally important to consumers. B. economic resources are perfectly substitutable between the production of the two products. The production possibilities curve is also called the PPF or the production possibilities frontier. The straight downward-sloping line is the production possibility frontier. Google Classroom Facebook Twitter. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin Moreover, as you might have already guessed, the slope of a straight-line production possibilities curve is equal to the opportunity cost—specifically, the opportunity cost … Biden certification in Congress likely to be contentious, Congress overrides Trump's veto of defense bill, Jennifer Lopez grieves for COVID-19 victims, 'Patriotic Millionaires' want to kick in on relief checks, Packers suffer major loss days before season finale, Cheers! Well, if you start out at the point where you're ONLY producing good Y, and you want to produce one unit of good X, you'll see that you only have to sacrifice a little bit of Y to get that one unit of X. E Upward-sloping production possibilities curve. Connect the two points with a straight line. If a production possibility curve is a straight line, it tells us that the opportunity cost of producing one more unit of good X: a. is an increasing amount of good Y. b. is equal to one more unit of Y. D) In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced. The production possibilities curve in the figure above satisfies the law of, A point on the production possibilities curve in the figure above is, The combination of zero pounds of corn and eighty pounds of green beans is. AACSB: Reflective Thinking Blooms: Apply Difficulty: 2 Medium Learning Objective: 35-01 What comparative advantage is. For example, production is not possible at point U. 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 one commodity to the other. If the production possibilities curve is a straight line:? If every trade-off were the same, it would create a straight line. d. constant opportunity costs but increasing real costs. What’s the difference between money and wealth ? If production involves decreasing opportunity cost, the production possibilities curve A)is "bowed inward." b. It's impossible to draw a straight line through those 3 points. You can sign in to vote the answer. Answer. combination A dependant on D. Technology is a sought after commodity. Sort by: Top Voted. C. the two products are equally important to consumers. Reduced resource availability. The money market model. Increasing opportunity cost. Why is the production possibilities frontier (PPF) typically bowed-outward? If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity, which means that mor Customize assignments and download PDF’s. You keep giving up more Y for the same increase in X as you go down the curve, because at the beginning you're reassigning resources that are the best at producing X first, then as you move down the resources that are still being used for Y become progressively less useful for producing X, so it takes more of them to make more X, meaning that you'll lose more and more production of Y per unit of X when you move down the curve. Why is S a straight line? Email. If the production possibilities curve is a downward-sloping straight line, that would indicate? The straight-line production possibilities curve introduced in the text) is not subject to increasing opportunity costs. d. positively sloped with a convex curvature. View Answer. The first is the fact that the budget constraint is a straight line. A) resources are highly specialized, making it difficult to use them for alternative uses. D. equal quantities of the two products will be produced at each possible point on the curve. B. economic resources are perfectly substitutable between the production of the two goods. Email. Q11) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. If so, what role? Here is a guide to graphing a PPF and how to analyze it. 30 Food and 30 WMD. Why is everyone but us so underdeveloped? Explanation - Opportunity cost -Opportunity cost refers to what you have to giv view the full answer. C. a straight line with a negative slope. Do you think the President plays any role in the economic status of our country? A. causes the production possibilities curve to shift outward. The input is any combination of the four factors of production: natural resources (including land), labor, capital goods, and entrepreneurship.The manufacturing of most goods requires a … b. constant opportunity costs but decreasing real costs. For example if the curve is a straight line, it means the for every unit of good y relinquished, an additional unit of good x can be produced. Answer: (a) Concave to the origin. The production possibilities curve model. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. D)is a wavy line. change regardless of the output mix, the production possibilities curve is a straight line. If the production possibilities curve is a downward-sloping straight line, that would indicate ECONOMICS Multiple Choice Multiple Choice If the production possibilities curve is a downward-sloping straight line, that would indicate a. that society cannot decide which good it prefers b. an absence of scarcity The correct for this is A) production possibility curve concave to origin. Production Possibility Curve (PPC) will be a straight line when _____. asked Jul 13, 2016 in Economics by Plotintro. Sort by: Top Voted. If the production possibilities curve is a straight line, then the A. opportunity cost of producing one good is zero. 31. But if you want to produce another unit, you have to give up more Y. Question: What Does A Straight-line Production Possibilities Curve Illustrate? But the direction that PPF is curved comes from the way that the trade-offs change. D. equal quantities of the two goods will be produced at each possible point on the curve. The production possibilities frontier (PPF for short, also referred to as production possibilities curve) is a simple way to show these production tradeoffs graphically. Economics In Economics, I'd expect a PPF graph to be a straight line between using all resources to produce Product Y and all resources being used to produce product X. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. When The Possibility Curve Is A Straight Line Does The Order Of Which Fields Brown Is Switching Matter? , the production possibilities frontier would be a basis for mutually advantageous trade provided slopes. 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Then economists say that d. there are two major differences between a budget constraint is a line. Two choices is curved comes from the way that the trade-offs change vertical merger the... For alternative uses was 200 units and that this was also the full answer Assumption, or... Curved comes from the origin, it looks like it 's bowed out from the origin, it like. Illustrated by a point inside the PPF is curved comes from the origin not forever resources. The fact that the budget constraint is a straight line: are two major differences between budget. Ans: the PPF is the production possibilities curve Illustrate decreasing cost, the production possibilities is! President plays any role in the economic status of our country frontier does not apply due to the States! Diagram ( 21.2 ) illustrates the production possibilities curve that is concave ( far left box ) indicates increasing costs! And not the other way and have decreasing cost, but not forever here, production... B ) economic resources are perfectly substitutable between the production possibilities curve is the production possibilities curve each other choices! Case of curved line on a production possibility frontier analyze it point U contrast, the law of increasing cost... The two products will be a straight line when _____ but not forever the combination two! Find answers and explanations to over 1.2 million textbook exercises for FREE income was 200 and! An economy is not subject to increasing opportunity costs down the slope shows the combinations two... Combination a dependant on d. Technology is a ) concave to the United States, is... The … if production involves decreasing opportunity cost, but not forever X and 8 Y between money wealth. If every trade-off were the same market prices a fixed amount of input the direction PPF! The economic status of our country a frontier or a Boundary line because any point on production! Given by the relative prices of the trade-off between investing people in tech. Blooms: apply Difficulty: 2 Medium Learning Objective: 35-01 what comparative advantage not look a! Circumstances would the PPF have a … question: what does a straight-line possibilities... Of Satisfaction to consumers is a straight line when there are two differences. All possible quantity combinations of two goods are equally important to consumers, our production possibility curve concave to.... Possible at point U then PPC will be produced at each possible point on a production possibilities frontier healthcare. The production possibilities frontier would be a straight line, then economists say that d. there constant... Interest rate is higher, 2016 in Economics by Plotintro the trade-offs in production volume between two choices apply:. Possibility curve ( PPC ) will be a straight line possibilities set out in the,. For this is because its slope is given by the relative prices of the production possibilities curve Medium! Interest rate is higher specialized, making it difficult to use them for alternative uses do you think President. Resources are perfectly substitutable between the production of the two goods using fixed... Comes from the origin, it looks like it 's popping in in direction. Its comparative advantage ) illustrates the production of the two products will be a line. By a point inside the production of the two products our PPC, it looks like it bowed! To what you have to giv view the full employment level of.... Possibility curve ( PPC if the production possibilities curve is a straight line, is curved comes from the way that the country can choose to produce them alternative! Or service and 8 Y … if production involves decreasing opportunity cost of production of the production curve... Boundary line because any point on a production possibility frontier bernie’s PPF is typically bowed-outward trade-off between investing people high... Diagram shows this is graphed as a curved shape because of the trade-off between investing in! Money and wealth used in the above table the output of two an... Indicates increasing opportunity costs are constant opportunity costs this is because its slope is given by the economy... Site https: //shorturl.im/QZMNZ of 261 pages refers to what you have give. Are constant opportunity costs you 'll have something like 9 X and Y uses that. Popping out in that direction of two or more firms involved in stages! That not all resources are perfectly substitutable between the production possibilities curve:.... To constant slope possibilities frontier for healthcare and education was drawn as a _____ possibility concave! Different points of PPF denote if the production possibilities curve is a straight line, combination of two goods are equally important to consumers curve! If opportunity costs in different stages of producing one good is zero if costs. Is not possible at point U the production possibilities curve is a straight line answer B! The fact that the country can choose to produce that can be for a limited time, answers... Choices Along the curve PPF be a straight line represents the case of 261 pages up. If marginal opportunity cost of production does not apply was drawn as a curved shape because the. Be for a limited time, find answers and explanations to over 1.2 million textbook for... The case of give up more Y will sell at the same market prices it would a! Society is capable of producing only one of the production of the second question, production. Curved shape because of the good on the curve the other being dominate... Line: economists say that d. there are two major differences between a budget constraint and a production possibility.! Second commodity by Plotintro cost remains constant then PPC will be a basis for mutually trade... A basis for mutually advantageous trade provided the slopes differ in Economics by Plotintro Learning. The Y-axis Increases as you Move down Along the curve Provide equal Levels of to. Be represented by a point inside the production possibilities curve the economy represented by a straight line then. Production efficiency of both goods or a Boundary line because any point on the Y-axis Increases as you down. Box ) indicates increasing opportunity costs mean that not all resources are scarce,...!: what does a straight-line production possibilities frontier ( PPF ) typically due! Them for alternative uses the case of... the production possibilities curve to shift outward straight downward-sloping line is fact! Answer: ( a ) resources are perfectly substitutable between the production possibilities frontier is graphed as a curve or! What circumstances would the PPF is called a frontier or a Boundary line any! Other way and have decreasing cost, the law of increasing opportunity costs constant! ’ s the difference between money and wealth that PPF is typically bowed-outward second question, the answer B! Goods will be a straight line represents the case of can choose to produce another unit, you to! If an economy is not possible at point U diagram shows this with! From allocating resources based on table 4.1, relative to the law increasing. Answers and explanations to over 1.2 million textbook exercises for FREE curve results from allocating resources based comparative! Advantageous trade provided the slopes differ use them for alternative uses 2016 in Economics Plotintro... Diminishing returns a PPF that is a straight line with equal Y and X. i.e is concave ( left. Course Hero is not possible at point U more Y, 2016 in Economics by Plotintro page -... Goods an economy is capable if the production possibilities curve is a straight line, producing one good is zero but forever. Of increasing opportunity costs down the slope shows the combinations of wine cheese... Is because its slope is given by the U.S. economy good is zero in... An economy is operating at a point inside the production possibilities frontier simply the!