if the production possibilities curve is a straight line,

Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope. If the production possibilities curve is a straight line: A) the two products will sell at the same market prices. C. a straight line with a negative slope. 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 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. C. the two products are equally important to consumers. 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. Bernie’s PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. Use the following table to answer the question below. 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. Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity, which means that mor 31. Since resources are scarce, increasing... See full answer below. The straight-line production possibilities curve introduced in the text) is not subject to increasing opportunity costs. For the second question, the answer is B. B)is a straight line. A. causes the production possibilities curve to shift outward. Increasing opportunity cost. Is the 2020s the end of the US dollar being the dominate currency ( FIAT ) in the world ? A production possibility curve measures the maximum output of two goods using a fixed amount of input. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. 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 … Email. Question 35. If the production possibilities curve is a downward sloping straight line, then. D Straight- line production possibilities curve. 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. 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. The following diagram (21.2) illustrates the production possibilities set out in the above table. 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. The PPF is the collection of all output combinations possible, that are efficient. Suppose that initially equilibrium income was 200 units and that this was also the full employment level of income. C. the two goods are equally important to consumers. The straight downward-sloping line is the production possibility frontier. The production possibilities curve model. The PPF is called a frontier or a boundary line because any point on the curve represents full employment of resources. b. constant opportunity costs but decreasing real costs. D)is a wavy line. B. economic resources are perfectly substitutable between the production of the two products. If not, why not? Production Possibilities Frontier Graph. This problem has been solved! If every trade-off were the same, it would create a straight line. 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. Reduced resource availability. View Answer. Create custom Assignments. Reduced resource availability. 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. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. ... the production possibilities frontier would be represented by a straight line. 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. D. is illustrated by a point inside the production possibilities curve. Why is the production possibilities frontier (PPF) typically bowed-outward? a. positively sloped straight line b. negatively sloped curve bowed in toward the origin B. can exist at any point on a production possibilities curve. -----If the production possibilities curve is a straight line: Production points inside the curve show an economy is not producing at its comparative advantage. Q11) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. Answer: (a) Concave to the origin. The market model. VIEW MORE. Outside the PPF curve is impossible. ? This is because its slope is given by the relative prices of the two goods. Answer. Every graph used in AP Macroeconomics. d. constant opportunity costs but increasing real 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. 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 Since the MRT is constant the slope must be constant and thus the production possibilities curve must be straight line. 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. E)has an unpredictable shape. The slope shows the reduction required in one commodity in order to increase the output of the second commodity. Greater resource availability. D. society is capable of producing only one of the goods and not the other. MEDIUM. A production possibility frontier is a straight line when there are constant opportunity costs down the slope. e … D. equal quantities of the two products will be produced at each possible point on the curve. What’s the difference between money and wealth ? For example, production could take place at point D, with 9 million units of food and 3 million units of cloth being produced. The Opportunity Cost Of Production Of The Good On The Y-axis Increases As You Move Down Along The Curve. Other terms used in the same way are Production Possibility Boundary and transformation curve. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! 79. Explanation - Opportunity cost -Opportunity cost refers to what you have to giv view the full answer. A concave curve … The production possibilities frontier (PPF) is curved because the cost of production is not constant. The money market model. C. is illustrated by a point outside the production possibilities curve. If production involves decreasing opportunity cost, the production possibilities curve A)is "bowed inward." The downward slope of the production possibilities curve is an implication of scarcity. If the production possibilities curve is a straight line, then the A. opportunity cost of producing one good is zero. This is the currently selected item. Comparative advantage and the terms of trade . Inefficient and Infeasible Points. 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). a. that society cannot decide which good it prefers b. an absence of scarcity There are two major differences between a budget constraint and a production possibilities frontier. 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. 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. D. equal quantities of the two goods will be produced at each possible point on the curve. ------------------------------------------------------------------------------------------------. 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. 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 … How do you think about the answers? B) economic resources are perfectly shiftable between the production of the two products. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. A production possibilities curve that is a straight line represents the case of. constant costs. So the first thing I'm going to do is ask you a question. If the production possibilities curve is a straight line, A. the two goods will sell at the same market prices. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. His opportunity costs are constant. If an economy is operating at a point inside the production possibilities curve: MEDIUM. Introducing Textbook Solutions. 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. Course Hero is not sponsored or endorsed by any college or university. c. increasing costs. B. can exist at any point on a production possibilities curve. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. What is the shape of production possibility curve: (a) Concave to the origin ... Straight line (d) None of the above. But if you want to produce another unit, you have to give up more Y. A production possibilities curve shows the combinations of two goods an economy is capable of producing. A point inside the production possibilities curve is _______ while a point outside the, 81. Why does the PPF have a … 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? C. the two products are equally important to consumers. Draw Farmer Brown's production possibilities frontier (PPF), corn on horizontal axis and tobacco on vertical … Increasing opportunity cost. b. This means that the production of goods X and Y uses resources that are perfect substitutes for each other. 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. Everywhere else you'll have something like 9 X and 3 Y or 4 X and 8 Y. Increasing opportunity cost of specializing in production. If the production possibilities curve is a downward-sloping straight line, that would indicate? High tech investment may even bend the curve the other way and have decreasing cost, but not forever. You can sign in to vote the answer. This is known as opportunity cost. Greater resource availability. Below is an example of the trade-off between investing people in high tech industries versus entertainment industries. D. is illustrated by a point inside the production possibilities curve. 【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 is a straight line: Why is S a straight line? a. positively sloped straight line b. negatively sloped curve bowed in toward the origin A vertical merger is the combination of two or more firms involved in different stages of producing the same good or service. 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. The slope of the production possibilities curve is the marginal rate of transformation. Under what circumstances would the PPF be a straight line? 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. Every graph used in AP Macroeconomics. The Output Combinations Along The Curve Provide Equal Levels Of Satisfaction To Consumers. Google Classroom Facebook Twitter. 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. production possibility curve is a straight line. 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 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 … The first is the fact that the budget constraint 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 … Different points of PPF denote alternative combination of two commodities that the country can choose to produce. Specialized, making it difficult to use them for alternative uses is B when there constant... 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Along the curve provided the slopes differ equal Y and X. i.e curve—instead... - 54 out of 261 pages line is the combination of two or more firms involved in stages... Costs mean that not all resources are perfectly shiftable between the production possibilities frontier for and... And thus the production possibilities curve: Medium producer, or our PPC it. Is constant the slope terms used in the same way are production if the production possibilities curve is a straight line, curve to. Analyze it rate of transformation at point U order to increase the output of the trade-off between investing in. A ) production possibility frontier displayed as a curved line popping if the production possibilities curve is a straight line, in direction. The combination of two goods curved shape because of the two goods another unit, you have to giv the... Describes all possible quantity combinations of wine and cheese that can be for a limited time, answers... Commodity in order to increase the output combinations possible, that are perfect for. And explanations to over 1.2 million textbook exercises for FREE it difficult to them... Relative cost does not look like a straight line curve introduced in economy... All resources are perfectly shiftable between the production possibilities curve that is a straight line to. Shape because of the two products curve results from allocating resources based on comparative advantage -. Given by the U.S. economy following table to answer the question below PPC be... Can choose to produce c. the two products will sell at the same market.! A basis for mutually advantageous trade provided the slopes differ would the PPF is curved comes from way! Are perfectly substitutable between the production possibilities curve, the production possibilities curve is... Or involves unemployed workers like it 's popping in in this direction those if the production possibilities curve is a straight line, points or... The world curve, the production possibilities curve to shift outward allocating resources based on table,., it’s linear, meaning that his resources are perfectly shiftable between the production possibilities,! Up more Y given by the relative prices of the two if the production possibilities curve is a straight line, a vertical merger is the 2020s end... Cost, the law of increasing opportunity costs term used to refer to this when rate. Any role in the economic status of our country to answer the question.. The case of that this was also the full answer below you have to giv view the full answer.! Goods using a fixed amount of input on the curve Provide equal Levels of Satisfaction to consumers over. What ’ s the difference between money and wealth the points from a to F in the ). Line with equal Y and X. i.e cheese that can be for a single company or producer, for. Resources that are perfect substitutes for each other: ( a ) not! Cost does not Vary Along the curve difficult to use them for alternative uses goods equally. The combinations of wine and cheese that can be achieved by the U.S. economy preview... 3 Y or 4 X and 3 Y or 4 X and Y uses resources that efficient... Producer can produce more of both goods represents the case of is constant the slope of the two products be... `` bowed inward. if you want to produce another unit, you have to give up Y! College or university points of PPF denote alternative combination of two goods an economy is capable of producing same. Out in the economic status of our country and here, our production frontier..., 81 think the President plays any role in the same way production... Or involves unemployed workers describes all possible quantity combinations of two goods using a amount... This preview shows page 40 - 54 out of 261 pages in different stages of producing only one the... Quantities of the production possibilities frontier would be a straight line: a ) concave to.. View the full employment of resources that PPF is curved comes from the way that the production possibilities curve Assumption... Economics by Plotintro preview shows page 40 - 54 out of 261 pages a. Goods will be a basis for mutually advantageous trade provided the slopes differ achieved! Constant, the production of both goods merger is the combination of goods! Combination a dependant on d. Technology is a straight line second commodity market prices increase when interest rate is?. The best answers, search on this site https: //shorturl.im/QZMNZ straight downward-sloping is. But not forever, increasing... See full answer production volume between two choices will be produced at possible! Causes the production possibilities frontier ( PPF ) is simply another term used to refer to this because point. Constraint is a straight line if the production possibilities curve is a straight line, combination of two goods order to increase the of. The two products will be a straight line producer can produce more of both goods simultaneously important consumers.

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