B. increasing opportunity costs. If a production possibilities frontier is a straight line, then production occurs under conditions of A. constant opportunity costs. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. However, the production possibilities frontier for healthcare and education was drawn as a curved line. ... -3 The production possibilities frontier can determine what points of production are:-unattainable-efficient-feasible Suppose there is a nation that can produce only two goods (good X and good Y). Start out with a graph of two things a country produces. The production possibility frontier (PPF) is a curve that is used to discover the mix of products that will use available resources most efficiently. C) the opportunity costs of the products are constant. a straight line. ANSWER: The following table illustrates constant opportunity costs: Benches. b. PPF being bowed outward. The production possibility frontier is an economic model and visual representation of the ideal production balance between two commodities given finite resources. The production possibilities frontier is concave to the origin because of the law of increasing costs. Production Possibility Frontier . The production possibilities frontier (PPF) is curved because the cost of production is not constant. Health care is shown on the vertical (or y) axis, and education is shown on the horizontal (or x) axis. But the direction that PPF is curved comes from the way that the trade-offs change. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. the A production possibilities frontier will be a straight line if_____.A. Related questions. 40. Chairs. c. need to select among the points making up the PPF. Explanation: The Production possibilities frontier is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised. 1 Answer Konstantinos Michailidis Sep 24, 2015 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. When using resources to produce one of the two items those resources cannot be used to make the second item. 30. Under what circumstances would the PPF be a straight line? A production possibilities frontier is a straight line when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. Answer link. E. Nations would do better by producing toward the middle of their production possibilities frontiers as opposed to the extreme points near the axes. D. Nations ought to devote at least some of their resources to national defense. c.the rate of tradeoff between the two goods being produced is constant. Points within the curve show when a country’s resources are not being fully utilised. 40. Production takes place over a given time period. (x) The PPF will be bowed outward instead of a straight line because the more resources a society uses to produce one good, the fewer resources it has available to produce another good. As more quantities of a product is produced, the fewer resources it has available to produce another good. 80. Solution: (C) Difference between a straight line and a curved production possibility: 1. A movement along the curve represents a transfer of labor resources out of one industry and into another such that all labor remains employed. The curve is a downward-sloping straight line, indicating we have assumed that there is a linear, negative relationship between the production of the two goods. 160. the economy is producing efficiently B.the economy is engaged in trade with at least one other economyC. Within the production possibilities frontier (PPF) framework, choice is depicted by the Select one: a. PPF itself. B) the two products must have the same price. A production possibility frontier that is a straight line sloping down from left to right suggests that: A) more of both goods could be produced moving along the frontier. It shows businesses and national economies the optimal production levels of two distinct capital goods competing for the same resources in production, and the opportunity cost associated with either decision. b. an economy is interdependent and engaged in trade instead of self-sufficient. 0. 10. Question 1 A production possibilities frontier is a straight line when Not yet answered Select one: Points out of 1.00 a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Let's assume that the blue line on the graph above represents today's production possibilities frontier. The production possibilities frontier (PPF) is a simple model designed to depict the production capabilities of an economy given current resources. A production possibilities frontier is a straight line when Select one a the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. 0. An economy that operates at the frontier has the highest standard of living it can achieve, as it is producing as much as it can using the same resources. The production possibility curve portrays the cost of society's choice between two different goods. guns) is more than enough to overcome depreciation, and the level of capital available in the future will be greater than the level available today. a. positively sloped straight line b. negatively sloped curve bowed in toward the origin A production possibilities frontier does not effect the growth of a country at all. It comes from the production processes for producing the two goods, and the limited amounts of resources available to use for that purpose. c) economies of scale. A production possibilities frontier will be a straight line if_____.A. Lesson summary: the production possibilities frontier. D. infinite opportunity costs. b) diseconomies of scale. 120. Production Possibilities Frontier Graph. Microeconomics Basic Economic Concepts Production–possibility frontier. If the amount produced is inside the curve, then all of the resources are not being used. 7. If every trade-off were the same, it would create a straight line. Why is the production possibilities frontier (PPF) typically bowed-outward? E. None of the above. 6. b. an economy is interdependent and engaged in trade instead of self-sufficient. 6. The economy’s resources are fixed in quantity and quality over this period. B. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good. Use the following to answer questions 28-29: 28. 27. c. the rate of tradeoff between the two goods being produced is constant. Where does the PPF come from? According to the Ricardian model, a country will have a comparative advantage in the product in which its 8. 20. c. the rate of tradeoff between the two goods being produced is constant. Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to the vertical or to the horizontal axis. A production possibilities frontier is a straight line when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. A movement along the curve represents a transfer of labor resources out of one industry and into another such that all labor remains employed. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. A production possibilities frontier showing health care and education. The straight downward-sloping line is the production possibility frontier. A. increasing the production of one good by x units entails no opportunity cost in terms of the other good. b.an economy is interdependent and engaged in trade instead of self-sufficient. A concave curve is one that bends outward from the origin. This is the currently selected item. C. decreasing opportunity costs. D) there are no opportunity costs. If today's level of production is at the purple point, the level of investment in capital goods (i.e. A production possibilities frontier is a straight line when a.the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. d. straight-line … A production possibilities frontier that is a downward- sloping straight line implies a) no economies of scope. b. an economy is interdependent and engaged in trade instead of self-sufficient. As more of a product is produced, it becomes increasingly more difficult to find resources that are well-suited to producing that product. Why does the PPF have a different shape? Assume that the production possibilities frontier is a straight line. The PPF assumes: Output is limited to two broad classes of products: Consumer goods and capital goods. 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. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. The straight downward-sloping line is the production possibility frontier. To understand why the PPF is curved, start by considering point A at the … I'm stuck on this question in my economics homework can anyone please help? PPCs for increasing, decreasing and constant opportunity cost. Thanks, Heather A production possibilities frontier will be a straight line if? It is a model used to find the most efficient use of resources when producing a combination of two products. 16. Solved: Two nations have straight-line production possibility frontiers, but with different slopes. increasing the production of one good by x unitsentails no opportunity cost in terms of the other goodD. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. QUESTION 10 A production possibilities frontier with increasing opportunity cost is considered and one with constant opportunity cost is considered A concave, convex OB.convex, concave. Which of the statements about the shape of the production possibilities frontier is (are) correct? This is known as opportunity cost. The Production Possibilities Frontier . The primary focus of microeconomics is. The main reason for a straight line production possibility frontier is that … It forms a shape that looks like a cave or a rainbow. Draw a production possibilities frontier (PPF) based on the data in your table and explain the condition necessary for a PPF to exhibit constant opportunity costs. 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