A production possibilities curve shows the combinations of two goods an economy is capable of producing. The Production Pos s ibility Frontier-PPF is generated because of the Law of Scarcity. The production possibilities frontier is used to illustrate the economic circumstances of scarcity, choice, and opportunity cost. B)technological progress. xref H�T�Oo� ��~�9��pq�&ƋM��j{watM*ԃ߾�X7=���`ބ+����7����������HAj�)�jl-0�\o�ce� �. 0000002069 00000 n 43. 0000001566 00000 n B) the fact that there are only two goods in the diagram. 13) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. Course Hero is not sponsored or endorsed by any college or university. Scarcity is represented on a production possibilities frontier figure by the fact there are attainable and unattainable points If the marginal benefit from another computer exceeds the marginal cost of the computer, then to use resources allocatively 0000002203 00000 n Segment 1 of The Production Possibilities Frontier uses the fictional economy of Econ Isle to discuss how limited resources result in a scarcity problem for the economy. B) the fact that there are only two goods in the diagram. 13. For example, production could take place at point D, with 9 million units of food and 3 million units of cloth being produced. Get step-by-step explanations, verified by experts. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! If country 1 is on its production possibilities frontier, then country 2 must be on its PPF, too. 0000006562 00000 n 0000023724 00000 n D) does not affect her production possibilities frontier. 13)Scarcity is represented on the production possibilities frontier by A)the fact that there are only two goods in the diagram. Scarcity is represented on the production possibilities frontier by:} A) the fact that there are only two goods in the diagram. The slope of the production possibilities frontier represents the magnitude of this tradeoff. trailer b�Ӱ��S'����@#&09p�L \A.�? D)the fact there are 13) 0000023481 00000 n 248 24 The PPF for country 1 is necessarily closer to the origin (or further to the left) than the PPF for country 2. c. If country 1 is productive d. b. the fact there are attainable and unattainable points. Answer: D Topic: Production Possibilities Frontier Skill: Analytical AACSB: Analytical Skills 22) On the vertical axis, the production possibilities frontier shows ________; on the horizontal axis, the production possibilities frontier shows ________. Answer: D Topic: Production Possibilities Frontier Skill: Recognition 8) A production possibilities frontier figure does NOT illustrate A) the limits on production imposed by our limited resources and technology. C) technological progress. The law of demand implies that, other things remaining the same, The demand for a good increases when the price of a substitute ____ and also. Skill: Conceptual C) is attainable only if prices fall. B) the exchange of The bowed-out shape of the 0000007234 00000 n 0000004070 00000 n This preview shows page 20 - 22 out of 31 pages. 20) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. In terms of our production possibilities curve, this is represented by a point such as H 1 which lies inside the production possibilities curve. On a production possibilities curve, unemployment is represented by: a. a point on the production possibilities curve. 20) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. Economic growth is represented on a production possibilities frontier (PPF) by the PPF a. getting steeper. 0000007729 00000 n D) the Introducing Textbook Solutions. 0000005901 00000 n B) the fact that there are only two goods in the diagram. B) the fact that there are only two goods in the diagram. As a reminder, the production possibilities frontier (PPF) is an economic model that shows the possible combinations of two products or services that could potentially be produced by a society.. C)the amount of the good on the horizontal axis forgone. 0000002554 00000 n 0000001650 00000 n 5) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. 13) Scarcity is represented on the production possi- D) is attainable B) the fact that there are only two goods in the diagram. Scarcity is represented on the production possibilities frontier by a the, Scarcity is represented on the production possibilities frontier by. 0000001939 00000 n The PPF is called a frontier or a boundary line because any point on the curve represents full employment Devarani and Saras run a business that involves setting up and testing computers. Scarcity is the root cause of economic problem : Scarcity is a relative concept. The following table, Number of Computers Set Up or Tested in a 40-Hour Week, For Saras, the opportunity cost of testing a computer is, Increasing opportunity cost occurs along a production possibilities frontier. %%EOF “If Mexico is currently operating at a point beyond its production possibilities frontier, then there are unemployed resources in Mexico.” Scarcity is represented outside of the frontier and enables us to visually see the limit of product as a line. 0000005238 00000 n 10) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. 0000032616 00000 n %PDF-1.4 %���� 20) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. 3. It follows that the PPF is It follows that the PPF is a … B) the fact that there are only two goods in the diagram. The opportunity cost of increasing the production of laptops from 0 to 1 000 is 2 000 mobile phones, whereas increasing the production of laptops from 3 … x�b```�V&Q~���1�0pL``p```dq�h`�p`b�``h`�`�pQ�Q��j"[��jG�e�4�]�E��8�H2�H�<1m�}���2�+V/���M�}�U��K�W>�r�qI�t�0���G��i^�.kO��5M�Ky?�M���{�)�%�s�P�F�圯k�]�ث_=m�N5�y[wfGOۡr���׃� {�%��������&e�E�p[���ѧ�l٥S/2e6�)������nF8�J�n�E&w"����~��L����ՀY[8�����IӸ� ���kjG���� Given this information, which of the following combinations is. 0000004656 00000 n 0000002631 00000 n ���b����G��xf��1�`7�y���ƨ�L�j3*c���s�(�>�5VCG1�vt�( ����⸀� v� !F �� T �Y��a3i@��!�T�n�IPi����1��"� 0000000016 00000 n C) technological progress. <<22EC1A00050C4C4799F0393EC465C7BC>]>> 4�_s3[�>} D) the fact there 0000024203 00000 n Refer to the table below to answer Question 9 and 10. Since the production possibilities frontier represents all of the points where all resources are being used efficiently, it must be the case that this economy has to produce fewer guns if it wants to produce more butter, and vice versa. On a production possibilities curve, growth is represented by: a. a movement down the production possibilities curve. Explain how the following can be represented in a PPF framework: the finiteness of resources implicit in the scarcity condition Scarcity is illustrated by the existence of the frontier: if there were unlimited resource availability, there would be … the fact that there are only two goods in the diagram. Scarcity is represented on a production possibility frontier figure by the fact that there are attainable and non view the full answer Previous question Next question 271 0 obj<>stream C) technological progress. C) technological progress. The table above lists six points on the production possibilities frontier for grain, and cars. On a production possibilities frontier (PPF) that shows the trade-off between consumer goods and capital goods given a fixed amount of labor, unemployment is illustrated by: c. a point within the frontier. C) the amount of the good on the horizontal axis forgone. D) the fact :)�!�=�%��?�������J�JIE E�㌡��X Topic: Production Possibilities Frontier B) is associated with unused resources. To describe the concept of the production possibilities frontier, assume that we live on an island that has only two cities (Lake and Desert), and two industries (cars and airplanes). Overview Let’s review the production possibilities frontier and focus more specifically on the shape of the curve. Scarcity is a situation in which resources available for the satisfaction of wants are less than the resources required for the satisfaction of human wants. Econ Isle’s production possibilities are graphed to show its frontier, and then used to discuss the opportunity costs of its production and consumption decisions. D) the fact In other words, scarcity means limited availability of resources in relation to demand. C) technological progress. Along its production possibilities frontier (PPF) an economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. D) the fact S��$�7L61�s�PR�s�����H��l�'�2j�:040py1N the amount of the good on the horizontal axis forgone. startxref increases when the price of a complement ____. D) the fact there At point H 1, 2 000 laptops and 10 000 mobile phones are produced, which is less than the potential output. 20) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. C) on the production possibilities frontier between points b and c. D) on the production possibilities frontier between points c and d. 95) Refer to the table above, which describes a … ��ֻ`���Q�`����f��b�Zg.�t ��@���. C) technological progress. 20) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. Unemployed resources are represented by points below the frontier. 0 B) technological progress. N��c� �C��)�������,k� �bS�� C) makes her production possibilities frontier flatter. 0000003379 00000 n The downward slope of the production possibilities curve is an implication of scarcity. 248 0 obj <> endobj 23) Scarcity is represented on a production possibilities frontier figure by A) the amount of the good on the horizontal axis forgone. B) the fact that there are only two goods in the diagram. D) the fact 0000000776 00000 n Scarcity is represented on the production possibilities frontier by a. the amount of the good on the horizontal axis forgone. 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