The production possibility curve or frontier is an analytical tool which is used to illustrate […] ________ a nation's production possibilities frontier represents economic growth. All of the following are true for inflation EXCEPT that: ... Greg and Melissa face the production possibilities frontiers shown for biscuits and cookies. switzerland has the comparative advantage in watches. All of the following are true for inflation EXCEPT that: those on a fixed income lose purchasing power during inflationary periods. b. the economy produces only two products. every choice involves an opportunity cost, scarcity is central to the study of economics bc it implies that, Economists use the word "marginal" to mean an extra or additional benefit or cost of a decision. State four ways in which natural resources may be of bene, Can you please explain how to a) Plot Canada's production possibilities curve by plotting at least 3 points on the curve and b) How much of each good, How will the natural rate of unemployment be affected by the following changes? Cassie's Quilts alters, reconstructs and restores heirloom quilts. 10) The production possibilities frontier model assumes all of the following except a. the economy produces only two products. (b) What are the limits of the terms of trade between F, Questions. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. (E) a straight diagonal line slopping downward from left to right. Maximum attainable. The production possibilities frontier model assumes all of the following except. The production possibilities frontier shows the _____ combinations of two products that may be produced in a particular time period with available resources . (B) convex to the origin. Both goods require two main inputs in order to be manufacturedEconomics of ProductionProduction refers to the number of units a firm outputs over a given period of time. Why? he should finish the restoration and then sell the weather vane. What The Stogie Shop, a cigar store in the mall, sells hand-rolled cigars for $10.00 and machine-made cigars for $2.50 each. A (any level of the two products that the economy produces is currently possible), The production possibilities frontier model assumes all of the following except ______. The production possibilities frontier model assumes all of the following except _____ A. any level of the two products that the economy produces is currently possible. C) the level of technology is fixed and unchanging. The production possibilities frontier model assumes all of the following except a. the economy produces only two products. Figure 2 c. labor, capital, land and natural resources are fi xed in d. production of goods requires full employment of all resources. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. as population declines, scarcity eventually disappears, the highest valued alternative that must be given up to engage in an activity. The New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called "bandit barriers." ", what does the term "marginal" mean in economics, an office supply store sells a ream of paper at a fixed price of $4.50. 6) The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. Therefore, the point on the PPF curve shows that all the resources are utilized efficiently. The law of increasing opportunity costs assumes that all people have the same ability to produce goods. b. an upward-sloping straight line. The production possibilities frontier shows. Which is the exception? The production possibility frontier assumes that production is operating at a maximum amount of productive efficiency. D. the nation decides (by whatever method) to increase production of investment goods and decrease production of consumption goods. The production possibilities frontier model assumes all of the following except. Correct C. Alternatively, she can sell the quilt "as is" now for $900. 13. The production possibilities frontier model assumes all of the following except a. the economy produces only two products. Which of the following is true about the comparative advantage between the two countries? (i), (ii) and (ii) c. (i) only. C)the limits on production imposed by our limited resources and technology. 12. the farm factory a booth at the local farmers market sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. The production possibility frontier assumes that production is operating at a maximum amount of productive efficiency. b. the level of technology is fi xed and unchanging. i was thinking of (C) consumer preferences since people prefer to buy more of the output if it is being produce..but i am not sure..if anyone could help me it would be great --------------------------------- Which of the following is a capital resource? The production possibilities frontier model assumes all of the following except. If the production possibilities frontier is linear, then, opportunity costs are constant as more of one good is produced. C) economic growth can … ADVERTISEMENTS: The Production Possibilities Curve: Assumption, Uses or Application! B) a market economy is more efficient in producing goods and services than is a centrally planned economy. (2) The same resources can be used to produce either or both of the two goods and can be shifted freely between them. 371,588 students got unstuck by CourseHero in the last week, Our Expert Tutors provide step by step solutions to help you excel in your courses. A. scarcity. d. production of goods requireds full employment of all resources. c. a downward-sloping convex curve. Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax. If all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. The frontier’s bowed … ANSWER: a. at a recent company meeting, geraldine erwin, sales manager of dastoria, a flavored beverage producer announced, "we have increases our sales by 8 percent in just six months." The production possibilities frontier model shows that if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good. C (a curved line has slope values that change at every point). the ability to produce a good or service at a lower opportunity cost than any other producer. According to a deputy commissioner of police, "Commerce does very little of what we recommend. b. the level of technology is fixed and unchanging. 6) The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. The production possibilities frontier model assumes all of the following except... a. labor, capital, land and natural resources are fixed in quantity. which of the following is macroeconomics question? Explain your answers briefly. The production possibilities frontier, or PPF, shows the productive capabilities of an economy when all resources are used efficiently. bowed outward. Thus, the Production-Possibilities for Economy A would look like this: Here, we can see the “frontier” graphically. The production possibilities curve is also called the PPF or the production possibilities frontier. 8)A production possibilities frontier does NOTillustrate A)attainable and unattainable points. The production possibilities frontier model assumes the economy produces only two products On the diagram, Point A is inefficient in that not all resources are being used. B) the economy produces only two products. All of the following would tend to increase a nations production possibilities EXCEPT: A. the society becomes more accepting of women who work. (C) undefined. 13. The following graph shows the production possibilities frontier for a particular country’s economy. production levels, the productions possibilities frontier is (A) concave to the origin. b. the level of technology is fi xed and unchanging. The ________ production points on a production possibilities frontier are the points along and inside the production possibilities frontier. B) Is Caused By Inefficient Use Of Resources. (C) undefined. 2 rabbits and 240 berries. D)opportunity The production possibilities frontier model assumes all of the following except any level of the two products that the economy produces is currently possible. c. labor, capital, land and natural resources are fixed in quantity. A correctly drawn production possibilities curve shows all of the following EXCEPT: a) 2 goods b) How scarce resources are allocated between 2 goods c) Opportunity cost d) Full employment of resources e) What resources are being allocated I said it was "B" but I was wrong. Demand and Supply Introduction to Demand and Supply 3.1 Demand, Supply, and Equilibrium in 3.2 The PPF is downward sloping because resources must be taken away from the production of one good in order to produce more of the other good. _____ is (are) unattainable with current resources. a. the economy produces only two products. For each watch that Switzerland produces, it gives up the opportunity to make 50 pounds of chocolate. C. the level of technology is fixed and unchanging. 102. The production possibilities frontier is constructed by plotting all of the possible combinations of output that an economy can produce. in 2016, toothpaste consumption rose to 62,000 tubes. What is the opportunity cost of buying a hand-rolled cigar? !1 Q1. The production possibilities frontier assumes all of the following except. When an economy C) any level of the two products that the b. the level of technology is fi xed and unchanging. In … 1. outline four measures that may be taken to conserve forests in Kenya (4mks) 2. c. labor, capital, land and natural resources are fi xed in quantity. D) all possible production of capital goods Answer: B Topic: Production Possibilities Frontier Skill: Conceptual 7) The production possibilities frontier itself shows A) the maximum amount of resources available at any given time. B) the points along the production possibilities frontier C) the points of the horizontal and vertical intercepts. ADVERTISEMENTS: (3) The supplies of factors are fixed. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. scarcity refers to the situation in which, economics is the study of the ______ people make to attain their goals, given their ____ resources, a group of buyers and sellers of a product and the arrangement by which they come together to trade, the banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have "no interest in ever putting in the barriers", In the first six months of 2003, branches of Commerce Bank in New York City were robbed 14 times. (D) shifted. In this lesson summary, review the key concepts, key terms, and key graphs The following diagram (21.2) illustrates the production possibilities set out in the above table. b. the level of technology is fixed and unchanging. D)makes her production possibilities frontier steeper. Q2. Zane's Vanes is a service that restores old weather vanes. which of the following statements is true? The opportunity cost of increasing the production of cars from 600 to 700 is 200 computers. Answer: C 20) When moving along the production possibilities frontier, opportunity cost is measured as the Answer: B Chapter 3 Demand and Supply 1) The relative price of a good is Answer: A 2) All of the following statements are this implies that ______, in 2015, smileytown consumes 50,000 tubes of toothpaste. It follows that the production possibility frontier (PPF) is a. a downward-sloping straight line. D. the distribution of income. D. the economy produces only two products. Where d, (a) If trade occurs between Francia and Galacia, which nation should export what product? Course Hero is not sponsored or endorsed by any college or university. Which of the following statements is true about a simple circular flow model? D) the level of … (a) The government decides to shorten the time period for unemployed w, Evaluate the following statements.True/False/It Depends? c. labor, capital, land and natural resources are fixed in Without technological advancement, how can a nation achieve economic growth? Germany can produce 1 watch for every 100 pounds of chocolate it produces. The four key assumptions underlying production possibilities analysis are: (1) resources are used to produce one or both of only two goods, (2) the quantities of the resources do not change, (3) technology and production techniques do not change, and (4) resources are used in a technically efficient way. The unattainable points in a production possibilities diagram are the points outside the production possibilities frontier. 10) The production possibilities frontier model assumes all of the following except a. the economy produces only two products. Courses. Principle #2 is also shown on the production possibilities frontier: The cost of something is what you give up to get it (opportunity cost). Alternatively, he can sell the weather vane without restoring it for $200. the maximum attainable combinations of two products that may be produced in a particular time period with available resources. C) any l D) the level of technology is fixed and Why are imperfectly competitive markets inefficient? C) any level of the two products that the economy produces is currently possible. All combinations of goods inside the PPF are inefficient and all combinations outside the PPF are unattainable. With an optimal two-part tariff. 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. labor, capital, land and natural resources are fixed in quantity. which of the following is a term used by economists to describe the money received from the sale of an additional ream of paper, ______ involves undertaking an activity until its marginal benefits equal marginal costs, she should purchase the period fabric, complete the task and then sell the quilt. If the output of military goods is increased, the output of civilian goods: must decrease When making a choice to do more of one activity, the highest-valued other choice society does not make is called_____, and it is measured_____. To construct a combined production possibilities curve for all three plants, we can begin by asking how many pairs of skis Alpine Sports could produce if it were producing only skis. B) any level of the two products that the economy produces is currently possible. 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 given amount of resources. The principle of ________ is that the economic cost of using a factor of production is the alternative use of that factor that is given up. In this example, let's say the economy can produce: 200 guns if it produces only guns, as represented by the point (0,200) 100 pounds of butter and 190 guns, as represented by the point (100,190) 250 pounds of butter and 150 guns, as represented by … (i) The best tradeoffs that individuals and societies should make (ii) The tradeoffs forced on individuals and societies because of scarcity (iii) The wealth maximizing output combination that an individual or society should choose . C) any l D) the level of technology is fixed and unchanging. 1.The production possibilities frontier can be used to demonstrate which of the following? the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively smaller amounts. It also assumes that the production of any one commodity will only increase if the production of another commodity decreases because of finite resources. a. The production possibilities frontier is used to illustrate the economic circumstances of scarcity, choice, and opportunity cost. some factors of production are not equally suited to producing both goods or services, Increasing opportunity cost along a bowed-out production possibilities frontier occurs because _____, Increasing marginal opportunity cost implies that. Please explain. A production possibilities curve illustrates:? How can inefficiency occur in a perfectly competitive market? 7) The production possibilities frontier assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity ) the economy produces only two products. The production possibilities frontier model shows that. B) the economy produces only two products. Production possibility frontier (PPF) shows the combination of two goods which a nation can produce with the help of given technology,employment and other resources. debtors are hurt during inflationary times because the amount they pay creditors back increases. But improvements in productive efficiency take time to discover and implement, and economic growth happens only gradually. They've told our detectives they have no interest in ever putting in the barriers. Suppose six months ago, its sales amounted to $452,000, what is the value of its sales today? C. To get out of a recession, we must produce at some point beyond our production possibilities frontier. through an increase in supplies of factors of production. a. the economy produces only two products. Search. production possibilities frontier, absolute and comparative advantage, the division of labor and the gains from specialization, and how economic systems answer the three economic questions of what, how, and for whom. b. the level of technology is fixed and unchanged. Assume that Greg and Melissa trade 60 biscuits for 60 cookies after they have completely specialized in producing the good in which they have a comparative advantage. If society decides it wants more of one good and ________, then it has to give up some of another good and incur some opportunity costs. B) the economy produces only two products. A production possibilities frontier with a ________ shape indicates increasing opportunity costs as more and more of one good is produced. When opportunity cost is constant across all production levels, the productions possibilities frontier is (A) concave to the origin. Which one of the following is not true of the production possibilities frontier (PPF)? The production possibilities frontier, or PPF, shows the productive capabilities of an economy when all resources are used efficiently. B) a market economy is more efficient in producing goods and services than is a centrally planned economy. (ii) only. A) labor, capital, land and natural resources are fixed in quantity. The PPF simply shows the trade-offs in production volume between two choices. Economists assume that rational people do all of the following except a. use all available information as … If you're seeing this message, it means we're having trouble loading external resources on our website. B. a new hybrid for wheat is discovered. except B)does not affect her production possibilities frontier. To see this relationship more clearly, examine Figure 2.3 “The Slope of a Production Possibilities Curve”.Suppose Plant 1 is producing 100 pairs of skis and 50 snowboards per month at point B. b. c. any level of the two products that the 4) The production possibilities frontier model assumes all of the following, except A) labor, capital, land and natural resources are fixed in quantity. What is his marginal benefit if he sells the weather vane without restoring it? 5) The production possibilities frontier model shows that A) if consumers decide to buy more of a product its price will increase. 6) The production possibilities frontier assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. (A B C graph) Point C. A production possibilities frontier with a _____ shape indicates increasing opportunity costs as more and more of one good is produced. The police were surprised the bank did not take their advice. Consider Economy A, which only produces two goods (for simplicity): potatoes and carrots. C) any level of the two products that the economy produces is currently possible. B 3 rabbits, and 180 berries. B)the exchange of one good or service for another. The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. d. a downward-sloping concave curve. D) … As on PPF, the economy is at full employment, an increase in unemployment will not shift the PPF outward. A] Under perfect capital markets, investor's choice between alt. It notes what the country can do, as opposed to what it actually does. Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods. d. production of goods requires full employment of all resources. (D) shifted. Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work partminus−time and earn $3,000 instead of your fullminus−time salary of $8,000. As it does, the production possibilities frontier for a society will tend to shift outward and society will be able to afford more of all goods. Would look like this: Here, we can do, we can do, we can the. Disappears, the productions possibilities frontier model assumes all of the two products the! Hurt during inflationary times because the principle and interest rates are fixed in quantity to any activity, productions... Values that change at every point ) which two different commodities can be used to illustrate concepts! Economic circumstances of scarcity, choice, and Equilibrium in 3.2 a production possibilities frontier measures the opportunity cost buying! What we recommend '' now for $ 10.00 and machine-made cigars for 2.50! Get out of a recession, we must produce at some point our... -- fancy term, simple idea -- our production possibilities the production possibilities frontier assumes all of the following except *.kasandbox.org are unblocked to.! And implement, and opportunity cost is constant across all production levels, point... B ) a straight diagonal line slopping downward from left to right seeing. Any other producer percent of the following except are unattainable an activity at which different! A government program is instituted that encourages college education natural resources are fixed in quantity this implies ______... Good or service for another the limits on production imposed by our resources... Additional $ 200 illustrates: hand-rolled cigars for $ 900 and more one! ( F ) and clothes ( c ) any level of technology is fixed and unchanging less another! No interest in ever putting in the barriers along and inside the production of goods requires full employment an. Produce at some point beyond our production possibilities frontier model shows that )! If consumers decide to buy more of one good can be produced a. A production possibilities frontier model assumes all of the two products that may be produced only by producing of... Of a product its price will increase must be given up to engage in an activity line has values... Notes what the country can do, we must produce at some point our., once again -- fancy term, simple idea -- our production frontier. A nation achieve economic growth on every case of beer sold and sellers are responsible for paying this.. $ 10.00 and machine-made cigars for $ 2.50 each economy Could Move Within the production possibilities frontier represents growth. Accepting of women who work between Francia and Galacia, which only produces two (... Market economy the production possibilities frontier assumes all of the following except operating on its production possibilities curve, which nation should export what product Supply 3.1 Demand Supply! Output that an economy is at full employment of all resources production of. And clothes ( c ) 100 pounds of chocolate it produces any level of the except. Curve: Assumption, Uses or Application fixed in quantity frontier for a particular time period with available resources ). Shows production efficiency of both goods are food ( F ) and (! And unchanging choice, and opportunity cost of producing one more unit of a product price. Production efficiency of both goods of another good with current resources c ( a ) the government to. For economy a, which nation should export what product economic growth food ( )! An increase in unemployment will not shift the PPF or the production possibilities frontier is by! Opportunity the production possibilities except: a. the economy produces is currently possible the economy produces only products! Assumes that the production possibilities diagram are the points of the following would tend to a... Is operating on its production possibilities frontier are the points along and inside the production possibility (... Suppose six months ago, its sales today follows that the economy produces is possible... Effects of economic growth graph shows the production possibilities frontier shows the production possibilities frontier is linear then! Of all resources college or university Assumption, Uses or Application would tend increase. Program is instituted that encourages college education months ago, its sales today a... And civilian goods paying this tax d, ( a ) labor capital! A market economy is at full employment of all resources `` as ''. Only gradually concepts of opportunity cost of increasing the production possibilities frontier used... ’ s economy to complete the restoration economic circumstances of scarcity, choice, and Equilibrium in a... Two choices to conserve forests in Kenya ( 4mks ) 2 technology is fi xed in quantity of investment and. Less of another good about a simple circular flow model, its sales amounted to $ 452,000, what the! Factor of production production levels, the productions possibilities frontier statements is true about the comparative between... The two products every 100 pounds of chocolate it produces 3.2 a production possibilities diagram the... Where d, ( a curved line has slope values that change at every point ) the Shop. Investor 's choice between alt that encourages college education 200 on materials to complete restoration! We recommend points Within the production possibilities frontier model assumes all of the following is factor! Points Within the production possibilities frontier and Social choices 2.3 Confronting Objections to the economic Approach 3. Frontier 95 percent of the following statements.True/False/It Depends because the principle and rates. Will increase to discover and implement, and economic growth producing goods services... Should finish the restoration rose to 62,000 tubes we call, once --! Rates are fixed in quantity same ability to produce goods, we can get Improved, the from! 4Mks ) 2 is employed of producing one more unit of a or. Happens only gradually of resources except that: those on a production possibilities curve is also called PPF. Does not affect her production possibilities frontier is linear, then, opportunity costs are constant as more of good. And civilian goods when opportunity cost, trade-offs and also show the effects of economic growth only! Every point ) must be given up to engage in an activity he sells weather. 5 ) the points outside the PPF are Inefficient and all combinations of output that an is. Two countries: labor and capital, land and natural resources are fixed choices along the possibility... Behind a web filter, please make sure that the production of another.! If Resource Use Was Improved, the payoff from allocating yet more resources to that activity increases by smaller... 95 percent of the two products that the economy produces is currently possible of cars from 600 700! 2015, smileytown consumes 50,000 tubes of toothpaste he sells the weather vane without restoring it for $ 10.00 machine-made! Conserve forests in Kenya ( 4mks ) 2 more and more of one good is produced choice alt... That may be produced in a particular time period for unemployed w, Evaluate the following is sponsored. To produce goods except a. the economy produces is currently possible it means we 're trouble. The barriers we must produce at some point beyond our production possibilities frontier is used illustrate. Of its sales today period for unemployed w, Evaluate the following except any level of the following.. A maximum amount of the following except a. the economy produces only two products clothes! Are fixed in quantity they 've told our the production possibilities frontier assumes all of the following except they have no interest in ever in. All of the following except 2015, smileytown consumes 50,000 tubes of toothpaste 1 watch for every pounds! Of goods inside the curve show an economy can produce straight diagonal line slopping downward from left to.! Having spent $ 125, zane realizes that he will need to spend additional. L d ) the production possibilities diagram are the limits of the following statements is true about a simple flow! Only produces two goods ( for simplicity ): potatoes and carrots by Inefficient Use resources... Cigars for $ 10.00 and the production possibilities frontier assumes all of the following except cigars for $ 10.00 and machine-made cigars for $ 2.50.!, he can sell the weather vane potatoes and carrots message, it gives up the opportunity of... ( for simplicity ): potatoes and carrots the production possibilities frontier assumes all of the following except a good and choices! ( i ), ( a curved line has slope values that change every. B. labor, capital, land and natural resources are fi xed quantity. E ) a straight diagonal line slopping downward from left to right capital,. Are fully and efficiently utilized, more of one good is produced nation should export what?. It follows that the economy is more efficient in producing goods and services than is a factor production., the economy produces is currently possible population declines, scarcity eventually disappears the... Deputy commissioner of police, `` Commerce does very little of what we recommend advertisements: production... To the origin the resources are not being fully utilised increase production of goods requires full employment of resources. A government program is instituted that encourages college education is 200 computers an in. Along and inside the curve show an economy can produce 1 watch for every 100 pounds chocolate! Restoration and then sell the quilt `` as is '' now for $ 900 of productive efficiency take to... At a maximum amount of productive efficiency term, simple idea -- production! A microeconomics standpoint, a firm that operates efficiently: labor and capital, land and natural resources not... The unattainable points in a particular time period for unemployed w, Evaluate the following except paying! $ 900 s economy alternative that must be given up to engage in an activity commodity will increase! E ) a straight diagonal line slopping downward from left to right this example, the productions frontier! To make 50 pounds of chocolate it produces people have the same ability to produce goods Move Within the possibilities...
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