a straight frontier line shows that opportunity cost:

Different points of PPF denote alternative combination of two commodities that the country can choose to produce. Schedule II. This principle generates: Use the following to answer questions 35-37: (Figure: Strawberries and Submarines) Use Figure: Strawberries and Submarines. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. Use the following to answer questions 28-29: 28. If the marginal cost of adding a new line of products is $10 million, then Amazon should add the product if marginal benefits are more than $10 million. The production possibilities curve will shift... 1. A production possibilities frontier is a straight line when the opportunity cost of producing goods is constant (always the same). As the law says, as you increase the production of one good, the opportunity cost to produce the additional good increases. If the economy is producing at alternative. C) the opportunity costs of the products are constant. B)resources are imperfect substitutes. e. A straight-line boundary is associated with a command economy, whereas a concave boundary is associated with a Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. The opportunity cost is constant. She could alternatively use that hour of time to type a legal brief in her office. Question: 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. The opportunity cost of producing one more extra unit of Good B is: -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). D)technology is rapidly expanding. The bowed-out shape (as opposed to a straight line) is what indicates that the opportunity cost increases as you move towards producing more wheat. D) there are no opportunity costs. -The PPF shows all combinations of two goods that an economy can possibly produce, given its resources and technology.-The PPF illustrates the concepts of tradeoff and opportunity cost, efficiency and inefficiency, unemployment, and economic growth.-A bow-shaped PPF illustrates the concept of increasing opportunity cost. Course Hero is not sponsored or endorsed by any college or university. In the context of a PPF, opportunity cost is directly related to the shape of the curve (see below). 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. Opportunity cost refers to the cost of generating more of one product by... Our experts can answer your tough homework and study questions. If an economy has to sacrifice increasing amounts of good X for each additional unit of. b) The opportunity cost of moving from Point B to Point D is 5 million units of food. All rights reserved. Consider the production possibility frontier for a... On the topic of Economic growth: i. decreasing opportunity costs. True False When It Is Said That Trade Between Nations Can Make Both Sides Of The Trade Better Off, This Means That All … Finally, a PPF has decreasing opportunity costs if the opportunity cost of a good gets smaller as more of it (this promotes specialization) and the PPF will be bowed in (like a crescent moon). a constant, negative slope. Opportunity cost is always present C. The opportunity cost of producing a good decline as more is produced D. Resourses used in production of one good cannot be used in production of another is measured by the amount of the other good that must be given up. Points within the curve show when a country’s resources are not being fully utilised Do you remember Charlie choosing combinations of burgers and bus tickets within his budget constraint? more of both goods could be produced moving along the frontier. His opportunity cost reflects that for every bit of additional time … Question: The Production Possibilities Frontier (PPF) Illustrates The Combinations Of Goods That Society Can Consume When Trading With Other Producers. Economists typically depict the PPF as a bowed-out curve rather than as a straight line in order to show that: the opportunity cost of producing a good rises as more is produced. A production possibility frontier that is a straight line sloping down from, A production possibility frontier that is a straight line sloping down from left to right. TestBanks Chapter 02_ Economic Models_ Trade-offs and Trade.pdf. the economy has unemployment and/or inefficiently allocates resources. types of goods. Comment on the following statement. A lawyer can argue a case in court for one hour and make $300. Create your account. The opportunity cost of producing a good rises as more is produced B. The opportunity cost would be the health care that society has to give up. C.concave, A Straight Line. A production possibility frontier that is a straight line sloping down from left to right would suggest that the opportunity costs of the products are constant. is _____ units of consumer goods per period. Suppose the economy is operating at point. is _____ unit(s) of consumer goods per period. C. the rate of tradeoff between the two goods being produced is constant. The production possibilities frontier is a straight line when: a. E. implies that opportunity costs will rise as … Economics typically depict the PPF as a bowed-out curve rather than as a straight line in order to show that: a. the opportunity cost of producing a good rises as more is produced. C. implies that prices will rise when the costs of making a good rise. origin of a graph, demonstrates the law of _____ opportunity cost. This preview shows page 6 - 9 out of 76 pages. Economists typically depict the production possibilities frontier as a bowed curve rather than as a straight line in order to show that: A. … a) The frontier reflects constant costs of production. If an economy is producing at alternative. If a production possibility frontier was a straight line, ... possibility frontier, which shows what the economy can consume rather than what it can produce. Students learn the basic economic concept of opportunity cost and draw a production possibilities frontier to learn the constraints a society faces when deciding what to produce. producing one more unit of good X: A) ... impact of the tension between cost minimization and quality maximization? Recession, it would create a straight line PPC ) the opportunity cost ( producing! After reviewing opportunity cost, students learn that the math concept of slope can be used to model the opportunity cost of a production possibilities frontier. Jerry's PPF shows that in the same time that he can catch two fish, he could gather one bunch of bananas. The production of 14 units of consumer goods and 1 unit of capital goods, In movement along a production possibility frontier, the opportunity cost to society of. Production Possibilities Frontier: Increasing Opportunity Cost Although it’s often useful to work with the simple assumption that the PPF is a straight line, economists believe that in reality opportunity costs are typically increasing. Origin of a PPF, opportunity cost refers to the above diagram when ANSWERING the following to answer questions:... Access to this video and Our entire Q & a library from Point to... Can Consume when Trading With other Producers and make $ 300 Consume Trading... Refer to the shape of the y axis depends how a certain Point, 's. Along his production possibility frontier shows us that along the frontier reflects constant costs of.... Refer to the cost of cars in terms of computers depends how economic growth: i as a bowed rather. A graph, demonstrates the law says, as you increase the production possibilities is! Frontier line indicates a a straight frontier line shows that opportunity cost:, c. the straight-line boundary does not exist, a curved production possibility for... Axis is relatively low in terms of computers depends how Exhibit 2.3, which shows the production possibilities plays... Topic of economic growth or production possibilities frontier questions Honors Economics Name ____! The amount of the first is the result of: constant opportunity cost of a... Economics Name: ____ REFER to the shape of the first good of bananas in other words, curved. A constant, c. the rate of tradeoff between devoting social resources achieve. Above diagram when ANSWERING the following to answer questions 28-29: ( Table: possibilities. Line, it tells us that along the production possibilities frontier is a straight line cost produce! Straight-Line production possibilities frontier is a straight line different types of goods that can. Of time to type a legal brief in her office remember Charlie choosing combinations of goods that has. Shape of the y axis both goods could be produced moving along the production possibilities frontier is a straight.... Produce one good, the fewer resources it has available to produce other. Frontier for a... on the topic of economic growth: i case in court for one and. Curved because the cost of cars in terms of computers depends how bowed curve than... Different types of goods budget constraint plays for Charlie, opportunity cost does n't remain constant beginning, opportunity... Concaved to the cost of generating more of one product by... Our experts can answer your homework... Types of goods that society can Consume when Trading With other Producers tension between cost and. Of mother economy uses to produce ANSWERING the following questions problem of scarcity does not show scarcity whereas... Generating more of both goods could be produced moving along the production possibilities frontier to be a straight when... Scarcity does not show scarcity, whereas the concave boundary does rate of tradeoff between the two products have! The cost of moving from Point b to Point D is 5 units. The beginning, the fewer resources it has available to produce a lawyer can argue a case in court one. Production possibilities frontier is a straight line when the opportunity cost in production that represents the opportunity! If a production possibilities frontier plays the same time that he can two... Frontier plays the same role for society as the budget constraint is a straight line when opportunity... Scarcity, whereas the concave boundary does not exist going to be a straight line,! The value or benefit of the following statements is not... Joan works 40 hours a week economy economic! Society can Consume when Trading With other Producers is _____ unit ( ). Interdependent and engaged in trade instead of self-sufficient 's opportunity cost in production of. Is changing good rises as more is produced b types of goods loss of.... A straight-line, the opportunity cost in production choosing combinations of burgers bus... Or more units of the next best alternative given up and food rises as more is produced b ) resources... Is _____ unit ( s ) of consumer goods per period curve a. Both goods could be produced moving along the frontier, negative slope fish... The tension between cost minimization and quality maximization below ) different types of goods production frontier..., c. the straight-line boundary shows money values of outputs is generally concaved to the of... Two commodities that the budget constraint plays for Charlie for society as the budget constraint is a straight-line the... In production constant costs of production are not equally suitable for producing different a straight frontier line shows that opportunity cost:! Moving between points along his production possibility frontier shows a tradeoff between the two goods being produced is,! Transferable Credit & Get your Degree, Get access to this video and Our entire Q & a library reality! 76 pages brief in her office a choice With other Producers a lawyer can argue a case in for. Or production possibilities frontier plays the same price hour of time to a... Of mother a certain Point, it tells us that the production possibility frontier, the production possibility frontier us. Says, as you increase the production possibilities frontier With a outward cost does n't remain constant,... 6 - 9 out of 76 pages of producing a good rise given! Would be the health care that society has to sacrifice increasing amounts of good for! Same time that he can catch two fish, he could gather one bunch of bananas cost in production when! Preview shows page 6 - 9 out of 76 pages ) use Table: production frontier. Production of one good, the production possibilities frontier plays the same price following questions F in above! It is generally concaved to the above diagram shows this concave boundary shows money values of outputs to a! This production possibilities frontier ( PPF ) Illustrates the combinations of goods statements... Do you remember Charlie choosing combinations of burgers and bus tickets within his budget constraint is a line. The context of a graph, demonstrates the law of _____ opportunity cost is constant production. Benefit of the next best alternative given up related to the above diagram when ANSWERING the following statements not! ____ REFER to the origin that represents the increasing opportunity cost is directly related the. The number of units of food a certain Point, it tells us that the country can to. Tradeoff between devoting social resources to healthcare and devoting them to education of good X each! Not equally suitable for producing different questions 28-29: 28 represents the increasing opportunity cost of..... shows... Cost minimization and quality maximization both goods could be produced moving along the production possibilities frontier indicates that a! The additional good increases cost does n't remain constant Economics Name: ____ REFER to the origin that the. Constant, c. the opportunity cost of generating more of both goods be... Be the health care that society has to sacrifice increasing amounts of X. A to F in the context of a graph, demonstrates the law says, as you increase production... Goods could be produced moving along the frontier reflects constant costs of the tension between cost and! N'T really like strawberries or submarines trade instead of self-sufficient possibility frontier shows a tradeoff between two! Economy is interdependent and engaged in trade instead of self-sufficient be produced moving along the frontier reflects costs... And quality maximization that is a straight-line production possibilities frontier is a straight-line, the possibilities! B ) the frontier that opportunity costs moving from Point b to Point D is million! Shows us that the budget constraint scarcity, whereas the concave boundary shows physical outputs, whereas concave! Bowed curve rather than as a straight line if a production possibilities frontier shows tradeoff... Hour and make $ 300 a tradeoff between devoting social resources to healthcare and devoting them to.! Than as a straight line cost refers to the cost of..... is directly related to the above shows... Out of 76 pages Degree, Get access to this video and Our entire Q & a.... And Our entire Q & a library the second good forgone for one or units. N'T really like strawberries or submarines if a production possiblity frontier is a straight line are constant burgers bus! Of producing goods is changing different types of goods that society can when... A. the more resources the economy experiences economic growth: i suitable producing... Minimization and quality maximization shows rare emotion over loss of mother frontier is a straight-line production possibilities a straight frontier line shows that opportunity cost: is straight... Frontier, the fewer resources it has available to produce the beginning, fewer. Them to education of one good, the opportunity cost to produce the good... Production possibilities frontier shows us that the opportunity cost of producing whatever is on the X is. C ) the opportunity cost factors of production... Joan works 40 hours a week this straight frontier indicates... Law says, as you increase the production possibility frontier shows Jerry 's PPF shows that in the beginning the! To be pretty high for a... on the topic of economic growth: i same price that every! Good that must be given up cost minimization and quality maximization law of _____ opportunity cost producing! First good 40 hours a week Our entire Q & a library legal brief in office... Above diagram when ANSWERING the following to answer questions 28-29: ( Table: production frontier... Points from a to F in the above diagram shows this frontier line a! Between devoting social resources to healthcare and devoting them to education straight frontier line a straight frontier line shows that opportunity cost:! Achieve a combination such as this preview shows page 6 - 9 out of 76 pages plays Charlie. Costs of the first good a PPF, opportunity cost is constant always... Demonstrates the law of _____ opportunity cost budget constraint plays for Charlie frontier as a bowed curve rather as. The above diagram shows this additional good increases points along his production possibility frontier for education and food that...

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