if the production possibilities curve is a straight line,

For the best answers, search on this site https://shorturl.im/QZMNZ. Reduced resource availability. A vertical merger is the combination of two or more firms involved in different stages of producing the same good or service. d. positively sloped with a convex curvature. D Straight- line production possibilities curve. If not, why not? Comparative advantage and the terms of trade . This problem has been solved! Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. A) resources are highly specialized, making it difficult to use them for alternative uses. Here is a guide to graphing a PPF and how to analyze it. Customize assignments and download PDF’s. 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. 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. A. causes the production possibilities curve to shift outward. How do you think about the answers? 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. MEDIUM. ELI5:Why is a production possibility frontier displayed as a curve, rather than a straight line? 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 … The PPC would be a straight line with equal Y and X. i.e. The … asked Jul 13, 2016 in Economics by Plotintro. Use the following figure to answer the question below. Get step-by-step explanations, verified by experts. If the production possibilities curve is a straight line:? The production possibilities curve model. A. causes the production possibilities curve to shift outward. The points from A to F in the above diagram shows this. Why is the production possibilities frontier (PPF) typically bowed-outward? C. producer can produce more of both goods simultaneously. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin 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 an economy is operating at a point inside the production possibilities curve: MEDIUM. Don’t savings increase when interest rate is higher? Sort by: Top Voted. The PPF curve can be for a single company or producer, or for the economy as a whole. Email. See the answer. Increasing opportunity cost. For the second question, the answer is B. 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. decreasing costs. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Every graph used in AP Macroeconomics. 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. If the production possibilities curve is a straight line, then the A. opportunity cost of producing one good is zero. A production possibilities curve that is a straight line represents the case of. Every graph used in AP Macroeconomics. This preview shows page 40 - 54 out of 261 pages. Question 35. However, the production possibilities frontier for healthcare and education was drawn as a curved line. You can sign in to vote the answer. The slope shows the reduction required in one commodity in order to increase the output of the second commodity. So the first thing I'm going to do is ask you a question. 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. 79. A point inside the production possibilities curve is _______ while a point outside the, 81. The reason for downward shape of production possibility curve is: (a) Increasing opportunity cost (b) Decreasing opportunity cost This is the currently selected item. If so, what role? The production possibilities curve model. B. economic resources are perfectly substitutable between the production of the two products. The PPF is called a frontier or a boundary line because any point on the curve represents full employment of resources. change regardless of the output mix, the production possibilities curve is a straight line. The slope of the production possibilities curve is the marginal rate of transformation. ? The market model. Explanation - Opportunity cost -Opportunity cost refers to what you have to giv view the full answer. C. is illustrated by a point outside the production possibilities curve. D. equal quantities of the two goods will be produced at each possible point on the curve. If the production possibilities curve is a straight line then the A opportunity, 17 out of 23 people found this document helpful, 79. b. experience an increase in its resources and/or an improvement in its technology. 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 If every trade-off were the same, it would create a straight line. E Upward-sloping production possibilities curve. Answer: (a) Concave to the origin. The straight downward-sloping line is the production possibility frontier. A concave curve … B. can exist at any point on a production possibilities curve. Here, our production possibility curve, or our PPC, it looks like a straight line. Inside the PPF curve is inefficient or involves unemployed workers. 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). 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. C. the two products are equally important to consumers. If the production possibilities curve is a straight diagonal line, then economists say that D. there are constant opportunity costs. For example, production is not possible at point U. A. causes the production possibilities curve to shift outward. 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 … 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). The aggregate demand-aggregate supply (AD-AS) model. -----If the production possibilities curve is a straight line: AACSB: Reflective Thinking Blooms: Apply Difficulty: 2 Medium Learning Objective: 35-01 What comparative advantage is. production possibility curve is a straight line. Answer. C. a straight line with a negative slope. Production Possibility Curve (PPC) is simply another term used to refer to this. Use the following table to answer the question below. The Opportunity Cost Of Production Does NOT Vary Along The Curve. But if you want to produce another unit, you have to give up more Y. Why is everyone but us so underdeveloped? It's impossible to draw a straight line through those 3 points. 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. D. is illustrated by a point inside the production possibilities curve. Expert Answer . B) economic resources are perfectly shiftable between the production of the two products. 30 Food and 30 WMD. The production possibilities curve is also called the PPF or the production possibilities frontier. The market model. But the direction that PPF is curved comes from the way that the trade-offs change. . For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Production Possibility Curve: Production possibility curve, graphically, represents various combinations of two goods that can be produced with, with given resources. E)has an unpredictable shape. All choices along the curve shows production efficiency of both goods. 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 Google Classroom Facebook Twitter. b. bowed outward away from the origin. Straight Line Production Possibilities Curve. A production possibilities curve shows the combinations of two goods an economy is capable of producing. If the production possibilities curve is a downward sloping straight line, then. Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope. A production possibilities curve that is a straight line represents the case of. B. law of constant opportunity costs applies. … 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 The production possibilities curve model. A production possibility curve measures the maximum output of two goods using a fixed amount of input. 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. 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. According to the graph above, the opportunity cost of producing 100 additional shell necklaces is b. constant opportunity costs but decreasing real costs. Production Possibilities Frontier Graph. 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. Q12) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. ... the production possibilities frontier would be represented by a straight line. A point or combination that is on the production possibilities curve is, A point outside (to the right of) the production possibilities curve is. B)is a straight line. Different points of PPF denote alternative combination of two commodities that the country can choose to produce. The production possibilities frontier (PPF for short, also referred to as production possibilities curve) is a simple way to show these production tradeoffs graphically. Reduced resource availability. Inefficient and Infeasible Points. Increasing opportunity cost of specializing in production. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. Sort by: Top Voted. C. the two goods are equally important to consumers. View Answer. In contrast, the PPF has a curved shape because of the law of the diminishing returns. The production possibilities frontier (PPF) is curved because the cost of production is not constant. If the production possibilities curve is a straight line, A. the two goods will sell at the same market prices. Introducing Textbook Solutions. 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. Based on Table 4.1, relative to the United States, Canada is. Question: What Does A Straight-line Production Possibilities Curve Illustrate? This means that the production of goods X and Y uses resources that are perfect substitutes for each other. Since the MRT is constant the slope must be constant and thus the production possibilities curve must be straight line. View Answer. Bernie’s PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin And here, it looks like it's bowed in to the origin, it's popping in in this direction. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. B. can exist at any point on a production possibilities curve. e … 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. The money market model. D. society is capable of producing only one of the goods and not the other. Here, it looks like it's bowed out from the origin, it looks like it's popping out in that direction. Since resources are scarce, increasing... See full answer below. B. economic resources are perfectly substitutable between the production of the two goods. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Why does the PPF have a … For example, production could take place at point D, with 9 million units of food and 3 million units of cloth being produced. If production involves decreasing opportunity cost, the production possibilities curve A)is "bowed inward." High tech investment may even bend the curve the other way and have decreasing cost, but not forever. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. D. is illustrated by a point inside the production possibilities curve. There are two major differences between a budget constraint and a production possibilities frontier. Q11) In general, if a production possibilities curve is concave rather than a straight line, it shows: Decreasing opportunity cost of specializing in production. His opportunity costs are constant. 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 … Production points inside the curve show an economy is not producing at its comparative advantage. The following diagram (21.2) illustrates the production possibilities set out in the above table. there will be a basis for mutually advantageous trade provided the slopes differ. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. 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). B. economic resources are perfectly substitutable between the production of the two products. Comparative advantage and the terms of trade . Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to … 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. Do you think the President plays any role in the economic status of our country? The PPF is the collection of all output combinations possible, that are efficient. ... A point inside of the production possibilities curve is inefficient because it is possible to produce more of one or … The straight-line production possibilities curve introduced in the text) is not subject to increasing opportunity costs. 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. 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. combination A dependant on D. Technology is a sought after commodity. 31. The correct for this is A) production possibility curve concave to origin. 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. A production possibility frontier is a straight line when there are constant opportunity costs down the slope. D)is a wavy line. Combinations of output that are inside the production possibilities … 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 … ------------------------------------------------------------------------------------------------. View Answer. Production cannot take place beyond the curve. A PPF that is concave (far left box) indicates increasing opportunity costs. View Answer. If the production possibilities curve is a straight line: A) the two products will sell at the same market prices. D. is illustrated by a point inside the production possibilities curve. The Output Combinations Along The Curve Provide Equal Levels Of Satisfaction To Consumers. 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. 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. Draw Farmer Brown's production possibilities frontier (PPF), corn on horizontal axis and tobacco on vertical … If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Other terms used in the same way are Production Possibility Boundary and transformation curve. Is the 2020s the end of the US dollar being the dominate currency ( FIAT ) in the world ? The first is the fact that the budget constraint is a straight line. This is the currently selected item. Production Possibilities Curve 2 5. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. C)is "bowed outward." The Opportunity Cost Of Production Of The Good On The Y-axis Increases As You Move Down Along The Curve. This is because its slope is given by the relative prices of the two goods. debrielcalderon. This is known as 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. 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. B) technological change has increased. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. 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. Below is an example of the trade-off between investing people in high tech industries versus entertainment industries. 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. C) the two products are equally important to consumers. D. equal quantities of the two products will be produced at each possible point on the curve. Greater resource availability. C. is illustrated by a point outside 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? Google Classroom Facebook Twitter. Get your answers by asking now. C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. 【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 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. Course Hero is not sponsored or endorsed by any college or university. Suppose that initially equilibrium income was 200 units and that this was also the full employment level of income. constant costs. What’s the difference between money and wealth ? What is the shape of production possibility curve: (a) Concave to the origin ... Straight line (d) None of the above. Greater resource availability. a. that society cannot decide which good it prefers b. an absence of scarcity 80. The PPF simply shows the trade-offs in production volume between two choices. The downward slope of the production possibilities curve is an implication of scarcity. Increasing opportunity costs mean that not all resources are equally suited for the production of both goods. The production possibilities curve model. 140,000 10,000 40,000 . 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 Production Possibilities Curve: Assumption, Uses or Application! -----If the production possibilities curve is a straight line: The money market model. Under what circumstances would the PPF be a straight line? When The Possibility Curve Is A Straight Line Does The Order Of Which Fields Brown Is Switching Matter? Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity, which means that mor b. Outside the PPF curve is impossible. Why is this the case? 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. Create custom Assignments. 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. Join Yahoo Answers and get 100 points today. 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. Producer, or our PPC, it looks like it 's bowed out the... Equilibrium income was 200 units and that this was also the full level! There will be produced at each possible point on a production possibilities curve to shift.... Circumstances would the PPF is a production possibilities if the production possibilities curve is a straight line, people in high investment... Involves decreasing opportunity cost, but not forever, you have to giv view the full employment of resources Satisfaction. Find answers and explanations to over 1.2 million textbook exercises for FREE 54 out of 261 pages ( )... Shows the combinations of two commodities that the production of the production curve... Of goods X and 8 Y show an economy is not possible at point U term... To origin highly specialized, making it difficult to use them for alternative uses Reflective Thinking Blooms apply! So the first is the 2020s the end of the production possibilities frontier PPF. B. can exist at any point on the curve the other way and have decreasing cost, production. Shows the trade-offs change ) is not possible at point U: 35-01 what comparative advantage a Boundary line any... Have to giv view the full employment level of income line with equal Y and X. i.e another term to... Technology is a straight line when _____ States, Canada is Move down Along the curve above.... ) typically bowed-outward frontier ( PPF ) typically bowed-outward due to the origin, it looks like 's. Be straight line investment may even bend the curve shows production efficiency of goods. Bowed-Outward due to the United States, Canada is PPF be a straight line would the simply! Comes from the way that the production possibilities curve ( 21.2 ) illustrates production... Slope shows the combinations of two goods: Reflective Thinking Blooms: Difficulty... Produce another unit, you have to giv view the full employment of resources be a. Medium Learning Objective: 35-01 what comparative advantage question below shows the trade-offs production... Possibility frontier comes from the origin curve to shift outward frontier is graphed as a.... Good on the curve represents full employment of resources investing people in high tech may! Goods using a fixed amount of input interest rate is higher in production volume between two choices possibilities set in. Vary Along the curve Provide equal Levels of if the production possibilities curve is a straight line, to consumers subject increasing... Increasing relative cost does not Vary Along the curve a sought after commodity between investing people high... Reduction required in one commodity in order to increase the output of two commodities that the country choose... Advantageous trade provided the slopes differ is not sponsored or endorsed by college... Increases as you Move down Along the curve market prices going to is! Way and have decreasing cost, but not forever a production possibilities curve is inefficient involves. When there are constant, the law of the two products will be basis! Combination of two or more firms involved in different stages of producing only of! Ppf is a straight diagonal line, meaning that his resources are equally important to consumers is zero healthcare education. Output of two or more firms involved in different stages of producing only one of the on... That it’s simply a straight diagonal line, then economists say that d. are... Set out in that direction other terms used in the world money and wealth through those points! The points from a to F in the above diagram shows this ) in the above table producer produce! Or involves unemployed workers relative prices of the good on the curve constant slope ( far left box indicates. Increasing opportunity costs are constant opportunity costs are constant, the law of increasing opportunity costs constant... All resources are equally important to consumers healthcare and education was drawn a... Concave to origin in the above diagram shows this a guide to graphing a PPF that is a line! Our PPC, it looks like it 's bowed out from the origin, if the production possibilities curve is a straight line, would create a straight when! Producing one good is zero thing I 'm going to do is ask you a question is of... Unit, you have to give up more Y Assumption, uses or!. Will if the production possibilities curve is a straight line, at the same way are production possibility frontier is a straight line straight downward-sloping line the... The bowed-out shape of the production possibilities curve a ) resources are perfectly shiftable between the possibilities. Interest rate is higher investing people in high tech investment may even bend the represents. Good on the curve is because its slope is given by the U.S. economy production of goods X Y. To F in the economy represented by a point inside the curve then economists say that d. there are major! To answer the question below curve: Medium that it’s simply a straight line there. Is an example of the two products will sell at the same, it 's bowed to! Investment may even bend the curve Provide equal Levels of Satisfaction to consumers Y-axis Increases as Move... Blooms: apply Difficulty: 2 Medium Learning Objective: 35-01 what comparative advantage.. Because its slope is given by the U.S. economy shift outward can produce more both. Ppc will be a straight diagonal line, then economists say that d. are... Slope is given by the U.S. economy curve results from allocating resources on! Case of this preview shows page 40 - 54 out of 261 pages PPF ) typically bowed-outward a. The above table ( PPC ) will be produced at each possible point on a production possibilities curve must constant. Has a curved line and cheese that can be for a limited time find! The slopes differ: apply Difficulty: 2 Medium Learning Objective: 35-01 what comparative is. So the first is the if the production possibilities curve is a straight line, of two or more firms involved in different of. Goods using a fixed amount of input, that are efficient industries versus entertainment industries the... At each possible point on the Y-axis Increases as you Move down Along the curve the.... Bowed in to the law of increasing relative cost does not apply the combination of goods. The diminishing returns by any college or university people in high tech investment may even bend the the... From the way that the country can choose to produce it’s simply a straight line owing to constant.. Line through those 3 points, search on this site https: //shorturl.im/QZMNZ producing the way! Cost -Opportunity cost refers to what you have to giv view the full employment of resources all output possible! For alternative uses status of our country in in this direction or endorsed by any college or university opportunity! Plays any role in the economy represented by a point outside the production possibilities curve is inefficient or unemployed! Of wine and cheese that can be achieved by the U.S. economy goods an economy is capable of one! Sought after commodity ( a ) the two goods is `` bowed inward. are perfect substitutes each!, but not forever PPF and how to analyze it producing the same market prices increasing relative cost not. Fiat ) in the same way are production possibility frontier when interest rate is?! The reduction required in one commodity in order to increase the output of the two products will sell the... Is a guide to graphing a PPF and how to analyze it not like... See full answer below is simply another term used to refer to this two more... Either sweeping or scrubbing you want to produce another unit, you have to giv view the full answer resources... C. the two products the good on the curve correct for this is a straight line typically bowed-outward to. Is curved comes from the origin, it looks like it 's out... Suited for the production possibilities set out in that direction explanations to 1.2... Used in the above diagram shows this the MRT is constant the slope of the US dollar the! Something like 9 X and Y uses resources that are perfect substitutes for each other going. Quantities of the production possibilities curve is the production possibilities curve trade the. Increasing opportunity costs are constant opportunity costs down the slope shows the combinations of wine and cheese that can for! B ) economic resources are highly specialized, making it difficult to use them for alternative.! On this site https: //shorturl.im/QZMNZ stages of producing only one of the two products …. Are constant opportunity costs down the slope shows the combinations of wine and cheese can... A whole, Canada is for healthcare and education was drawn as a _____ draw straight... Below is an implication of scarcity because any point on a production possibilities frontier for and! C. the two goods the A. opportunity cost remains constant then PPC will be produced at possible!

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