The graph below shows two production possibilities curves (PPC) for the mythical nation of New Bispo. In a nation with excessive population growth, and unskilled labor, the production possibilities curve tends. A production possibility Frontier is a curve showing all maximum output possibilities for two goods. Opportunity cost represents the worst of the various alternatives that must be given up when a choice is made in the context of scarcity. A proportionate increase in the total supplies (endowments) of all factors of product... A free-trade equilibrium exists in which the United States exports food and imports clothing. d. become horizontal. What would it mean if the PPF were bowed inward? B. it must be growing. False. The slope of the production possibilities frontier represents the magnitude of this tradeoff. The economic concept, guns or butter, means that: A. a person can spend money on either sports equipment or food. Frequently Asked Questions - Production Possibility Frontier. What is different between Shape and Shift in PPC? Define the concept of a production possibilities frontier. Services, Working Scholars® Bringing Tuition-Free College to the Community. Refer to the figure above. Given below is a production possibilities combination of a hypothetical economy producing under conditions of efficiency, contact technology, and constant level of resources. Periods of full employment correspond to: a. points outside the ppf. Why does PPF become a straight line? c. is operating on its... _____ is (are) inefficient in that not all resources are being used. True False Explain. How is it attainable and unattainable? The area inside (within) the production possibilities frontier (PPF) contains a. normative points. Suppose that Ted 's computer crashes. C. decrease in costs of production. When two individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage, A. they both obtain consumption outside their production possibilities frontier. According to the neoclassical growth model, a technological change [{Blank}] and a change in the capital stock [{Blank}]. Along a production possibilities curve showing capital and consumption goods production, which of the following pairs are being held as fixed? The Production Possibilities Model/Frontier(PPF) illustrates the concepts of Scarcity, Choice(trade-off), and Opportunity Cost(value forgone); under the assumptions of: fixed (limited) resources, f... Use the table below to answer questions:. a. Refer to the figure below. A war would most likely: a. Explain the effect of each of these on the shape and position of the country's production-possibility curve: a. We are currently at the following point on our PPC: 1,000 units of Consumer Goods and 800 units of Capital Goods. b. more of one good and less of the other. Question 7 Suppose a country is currently producing at a point on its production possibility frontier, and undertakes no trade with other countries. The slope of a country's production possibility frontier is equal to __ and the optimal production point is located where the slope is equal to __. Which of the following will result in a movement along the aggregate production function? 1)The production possibilities frontier A)refers to the technology used in such goods as computers and military aircraft. The Production Possibilities Frontier. a. b. efficiently. Which allocation point in the short-run production possibilities frontier (PPF) will lead to the most significant growth in the long-run PPF? a. rise of the clerical and professional sectors for women b. increased education of women c. labor-savings... ___ specializes in skis and produces ___. The figure is the production possibilities frontier of a firm. Draw a production possibilities frontier, representing the economy's possible production of milk and eggs. The sum of watching two half-hour TV sitcoms, playing pool, and doing your laundry. Point A on the PPF represents the... A report comes out from the United States Federal Reserve bank that indicates the current unemployment rate is around 2.3%. b. b. has eliminated scarcity. a. Under what condition is PPF linear rather than bowed out? The question is broad, but I believe there is plenty of literature that defines this concept in similarly broad terms. In the given figure, a shift from A to B seems most consistent with which of the following scenarios? Which of the following would be feasible terms for trade between Latalia and Trombonia? B. amounts of imports and exports of the two nations. B) increase its absolute advantage for its imported goods. The most likely source of this economic growth is what? How does a production possibility curve show diminishing returns? B. Which of the following reasons might explain why an economy would be operating inside its production possibilities curve (PPC)? At the same time, the politician... An increase in a country's technology would most likely: A. move the country further up its production possibilities curve. Shown below are the production possibilities curves for two nations: the United States and Chile. 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. The total supply of labor is 100 units. c. shifting inward. b) operating with unemployed resources. The figure above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. Can't find the question you're looking for? Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. What can you determine about the production of the two goods? c. outward shift of the P... Economic growth is represented on a production possibilities frontier (PPF) by the PPF a. getting steeper. The PPC or production possibility curve/ frontier is a presumptive depiction of the different conceivable combinations of two goods that can be produced within the given available resource. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. Viewed 1k times -1 $\begingroup$ Can someone please tell me how or why the curve shifts outward. FAQs - Production Possibility Frontier Using a production possibility curve, explain what is meant by opportunity cost. Increases in resources or improvements in technology will cause the production possibilities frontier to: a. shift outward. The figure to the right illustrates the trade offs facing Ford Motor Company.The line in the graph is Ford's production possibilities frontier. Suppose, in a region, each household produces either 1 pair of shoes or 1 gallon of milk per hour. Refer to Figure. Along a given production-possibilities curve involving two goods, producing more of one good requires that: a. a better technology be employed. C. of the law of increasing costs. Given the production possibilities curve, the combination of civilian and war goods indicated by point X is unattainable to this economy. The nation invests in res... A production possibility frontier will be a straight line when: A. efficiency is achieved. A. A rise in the price of one or both of the goods being produced, b. c. shifts upward. A non-linear ("bending") production possibilities model assumes that: a. technology can advance. An economy's production of two goods is efficient if: a. all members of society consume equal portions of the goods. B... An economy produces hot dogs and hamburgers. a. In the coming production period, Muir needs to decide, how many rolls of each grade should be p... Creative sports design (CSD) manufactures a standard size racket and an oversized racket. Questions about tax and transfer policy. If the curve of a production possibility frontier is concave, would the opportunity cost of clothing production increase if the shape of the curve is convex instead? Choose the one alternative that best completes the statement or answers the question. Given a fixed quantity of resources and technology, which of the following statements is true? If the resources used to produce two goods are specialized, then the production possibilities frontier has a bowed-out shape. Give an example of a two-good economy where the production possibility set would be bowed inwards. The bowed shape of the production possibilities frontier can be explained by the fact that: a. all resources are scarce. a. a. Provide an example. Go ahead and submit it to our experts to be answered. The benefit of a one-unit increase in an activity: A. is always greater than the opportunity cost of that activity. Which of the following statements is (are) correct? Technological progress means that we produce more output with the same amount of inputs. In figure 1.1, what is true about the production mix at point C and at point D? It has excess capacity in its assets in the amount of 22%. Practice Questions to accompany Mankiw & Taylor: Economics 4 c. Demonstrate in Exhibit 4 the impact of growth on a production possibilities frontier such as the one shown above. If all the economy s resources are used efficiently to produce good B, then the economy is at point _____. True or false: The production possibilities curve for an economy that experiences a constant opportunity cost of production is linear. The present choice of alternative B compared with alternative D would tend to promote A. increased consumption in the present. The combinations of output that an economy should produce. a. When an economy grows, its production possibilities frontier: a. shifts to the right. C. moves the econom... Increasing opportunity cost implies that: A. the society will be producing inside its production possibilities frontier. b. positive points. Briefly explain where an economy would prefer to be on the PPC. True b. True or false: Any output combination outside the production possibilities curve is attainable in the current period only of prices decrease. How would they be described? 5. What we cannot do is something that's beyond this. "When a point is on the production possibilities curve and there are no other points specifically on the curve" How can we interpret this point? Let’s take an example of Samsung electronic devices. B. decreased consumption in the future. Which of the following statements about an outward shift of the production possibilities frontier is true? Based on the table above, a production possibility frontier for Nepal can be plotted as below: Use the Nepal production table and production possibility frontier to answer the following questions. When we say maximum production, I will give an example what I mean. In a production possibilities frontier, which of the following would describe the location of an efficient point of production? True False. B. a company must decide whether to manufacture guns or butter. Which of the following is a normative statement? a. concept of absolute advantage b. law of positive statements c. l... A graph that shows the maximum attainable combinations of two goods when society efficiently uses its productive resources is called a. a production possibilities frontier (PPF). There are 20 workers in the United States and each can produce either 5 computers or 40 tons of rice. a. There are two goods, A and B. Suppose you have $15 to spend for an evening of fun with friends at the beach. a) maximum attainable b) only c) equ... How does the PPF highlight the concepts of scarcity, choice, and opportunity cost? ; Economizing of resources means utilisation of resources in best possible manner to maximize output. It is significant because it represents all possible output combinations the economy can choose from when it is operating at... A nation with fixed quantities of resources is able to produce any of the following combinations of bread and ovens: a. C. a government mus... How would you illustrate the impact, of each of the following events, on a production possibilities curve, for factory goods and farm goods? b. aggregate demand curve; outward. A. There may be better definitions out there, but this one should probably work in a lot of cases: The bowed-out shape of the production possibilities frontier indicates increasing opportunity costs. An increase in national saving and investment. What can you determine about the production of the two goods? The table below shows their Production possibilities schedule, which describe various combinations of fishing... What is a production possibilities frontier (PPF)? Sometimes C. Never. If the relative price of... What kind of choice does a PPF represent, and how does it illustrate a number of economic principles? In other words, you face a trade-off: any time you spend harvesting pineapples is time that cannot be spent looking for crabs. D. neither efficient nor feasible. A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or Transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be … b. shift their PPF outward. Suppose an assembly line has a bottleneck at a workstation with a processing time of 5 minutes. How do you draw a production possibilities frontier? c. Opportunity cost - to gain more of a good, something else must be given up. A nation's production possibilities curve might shift up and outward as a result of: a. Depletion of natural resources. True or false? The production possibilities curve for an economy that experiences a constant opportunity cost of production is linear. a) Lack of technology b) Lack of physical capital c) High death rates d) None of the above. The following table shows the daily output resulting from various possible combi... A negative marginal product of labor necessarily implies a downward sloping production frontier at that level of labor input. Draw and explain a production possibilities frontier for an economy that produces milk and cookies. Get help with your Production–possibility frontier homework. b. the difference between microanalysis and macro analysis. Production Possibility Frontier (PPF) is a graph that shows the potential combinations of goods that an economy is able to produce given available technology and factors of production. Suppose one factory produces residential windows and doors. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland a. Suppose that a politician tells you about a plan to create two expensive but necessary programs to build more production facilities for solar power and wind power. Batch size is 200 and the average n... Joan, who has been a university student for a year, has just started a new job. Suppose this hypothetical economy is currently operating at point A on PF 1. Suppose that there are only two types of output in a country: nuclear missiles and consumer goods. A. What time to produce, what place to produce, and how to produce? B. feasible, but not efficient. *a. A. We consider a typical exam type question for 1st year university economic students. The production possibilities curve a. shows all combinations of goods that society most desires. A. a technological advance B. training of the workforce C. an increase in the country's capital stock. b. points inside the ppf. C. opportunity cost is... Production possibilities frontiers are concave to the origin because: A. of inefficiencies in the economy. If a country is producing efficiently, it will produce __ its production possibilities curve. a. at the horizontal intercept of Tomaso's production possibilities front... An outward shift of a nation's production possibilities frontier represents _____. Draw the production possibilities frontier for the two goods above, placing apples on the horizontal axis. How can a nation's production possibilities curve shift inward? B. We live in a world with only two goods. Mythica, which is a hypothetical economy, produces only two goods – textbooks and computers. The production-possibility frontier determines whether a company is using its resources efficiently or not. The production possibilities frontier will have a negative slope, b. (c) is more concave... What would result in a shift of the production possibility curve? 400 tacos and 0 burritos, b. Which point(s) would be preferred to point F. Explain. New Bispo must allocate its resources for the production of capital goods and consumer goods. 2. Points below a firm's total product curve are A. technologically efficient but not attainable. c. an outward shift of the... On a production possibilities curve, unemployment is represented by: a. a point on the production possibilities curve. Which is not a statement about the "production possibility frontier"? The slop of the production possibilities frontier is equal to: a. Which of the following best describes the three fundamental economic questions? On a production possibilities curve, production is efficient if Select one: a. the production combination of goods is inside the curve. Which of the following shifts the production possibilities frontier outward? B. of opportunity cost. Describe the different ways a process technician can check for leaks in piping, tubing, or hosing. Explain. 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. And that curve we call, once again-- fancy term, simple idea-- our production possibilities frontier. | Economics |Biology |100 |40 |90 |60 |80... A point that lies inside the Production Possibilities Curve may be caused by _____. If an economy is producing at a point inside its PPF: a) it is producing efficiently. (y) If this economy was producing 80 tables... An economy's production possibilities frontier would shift outward as a result of: (x) a decrease in the rate of unemployment as more workers became employed. Ask Question Asked 3 years, 8 months ago. Point F is never attainable under the current resources of the firm. C. the consumption of more capital goods. Would the production possibilities frontier for Parsimonious Country shift more or less than that for Party Country? a) true b) false c) uncertain Explain. A.They are unattainable without additional resources. Complete the following table and identify the decreasing returns. B. the domestic money market is in equilibrium. You can only choose one activity. Suppose you find a production possibilities frontier (PPF) that is shaped like a straight line. 1 ton of beans for 1 ton of pork, b. Which is not one of the assumptions underlying the Production Possibilities Curve: a. c. the opportunity cost of one good... How/why did rising mechanization and mass production lead to greater productivity? Production Possibilities A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. © copyright 2003-2020 Study.com. Suppose an economy moves from a point inside the production possibilities curve to one on the curve. During this period, the technology that affects the process of production is assumed to be constant. Make sure that the graph includes all relevant numbers. Plot the student's production possibilities... An economy produces hotdogs and hamburgers. a. Create an account to browse all assets today, Production Possibility Frontier Questions and Answers, Biological and Biomedical It follows that country X is operating: a. beyond its production possibilities frontier (PPF) b. on its PPF c. inside (below) its PPF d. at a productive effi... Production is inefficient: a. When society is producing the largest possible output from its resources, it is operating a. inefficiently. The goods that a society can produce and how these goods change in the course of time. Inefficiency exists whenever the economy's output combination lies inside its production possibilities curve (frontier). The nation's system of higher education slowly declines in quality. The following scenario describe various straight-line production possibility boundaries for this factory. Maryam allocates her time between deciding websites and teaching web designing. The following table shows scores that a student can earn on two upcoming exam according tot the amount of time devoted to study. b. more of the other good be produced. Less government spending C. Better training of employees which resulted in increased productivity D. Productive inefficiency as a result of inadequate factory maintenance Because damage to natural resources, such as might be caused by deforestation leading to erosion of topsoil, has shrunk the land resource. Growth of production capacity is shown by: a. When does it shift clockwise or counter-clockwise? True b. The production possibilities frontier shows A. the total cost of producing combinations of two goods along the... A government subsidy paid to a firm: i) increases the demand for the good. Trivia, Economics Quiz: Test On Microeconomics! 4/5 wallet and Merve's opportunity cost of one purse is 3/2 wallets. Is the statement true or false? If an economy produces its most wanted goods but uses outdated production methods, it is . The United States can produce 65,000 units of clothing per yea... Muir Manufacturing produces two popular grades of commercial carpeting among its many other products. Production possibility frontier or production possibility curve shows all possible combinations of two set of goods that an economy can produce with available resources and given technology, assuming that all resources are fully and efficiently utilized. In class, only two "realistic" examples are taught: constant opportunity cost and increasing opportunity cost. b. In fact, it can produce all the following combinations of computers and books. a) The scarcity of resources, The sky is green with pink polka dots. What has no effect on the shape of the production possibility curve? Explain how a PPC/F can be used to illustrate scarcity, choice, opportunity cost and productive efficiency. C) What is the opportunity cost of increasing health care from 190 to 270 un... A production possibilities frontier illustrates the maximum amount of two different goods that can be produced if: a. Two nations have straight-line production possibility frontiers, but with different slopes. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall. A production possibility can show the different choices that an economy faces. Explain or demonstrate why each nation can gain from trade. When an economy produces a combination of goods that lies on the production possibilities frontier: A. resources are being used fully and efficiently. Production of the two goods is subje... At full employment, a society produces A. somewhere within its production possibilities frontier (PPF). A production point outside the curve: a) may be attained if new resources are di... Answer true or false: A production possibilities frontier will shift outward if there is an improvement in technology. Trivia, Microeconomics Quiz: Elasticity & Its Application. ii. Given production possibilities frontier (a), the combination of Capital and consumer goods indicated by point L: O would entail substantial unemployment. a. point E b. point A c. point C d. point D e. point B. B) If maximum health care is provided, how much education will be provided? b. the budget constraint model de... A budget constraint model differs from the production possibilities model in that, typically: a. the production possibilities model demonstrates diminishing returns. B. neither attainable nor technologically efficient. Perfect complementary relationship between all inputs b. An increase in transfer payments. The opportunity cost is constant, c. The opportunity cost is increasing, d. The opportunity cost i... An outward shift of the production possibilities curve represents A. economic growth. Give a personal example of a production possibilities curve. a. The following table illustrates the points a student can earn on examination in Economics and Biology if the student uses all available hours for study. A decline in the... Ceteris paribus, which of the following would tend to shift an economy's Production Possibilities Curve to the left? Practice Quiz! This problem set asks you to use diagrammatic techniques to evaluate the effects of various changes on the equilibrium in a specific factor (Ricardo-Viner) model. What is the most likely explanation for this? a. Inefficient production is represented by which point(s)? Microeconomics: What is a production possibilities frontier? Explain the main factors that contribute to economic growth and apply this concept of the PPF to a c... State True or False and justify your answer: In the Production Possibilities Frontier (PPF) model we assume technology does not change as an economy moves along a particular PPF; so there is no lea... A point beyond (to the right of) the production possibilities curve illustrates: a. a production combination of no inflation and no price changes over time. A drought that limits onion production would shift the PPF in which direction, and do what to the opportunity cost of producing onions? Describe the production possibilities curve, in an economic environment. In a simple world where resources are abundant, a production possibilities frontier between two goods may be a straight line. Which of the following will cause the production possibilities frontier to shift outward? True False. An increase in the labor force will cause out an outwar... What will shift the production possibilities curve outward? An increase in government spending. What is the Production Possibilities Curve? How may production be impacted from an increase in immigration, health care spending by the government, or an increase in college attendance? e. bett... A production possibilities frontier will shift outward if there is an improvement in technology. Draw a PPC graph of the US showing it is making electronics and wheat. B. reflects economic decline. What is a production possibilities curve (frontier)? These combinations can also be shown graphically, the result being a production possibility frontier. True or false? e. high opportunity cost points. Which of the following is a possible explanation for this outcome? In a Production Possibilities Curve depicting the trade-off between with capital goods vs. consumer goods, an economy choosing more capital goods and less consumption goods will, ceteris paribus: a... One way to examine the marginal cost of a good is by looking at the opportunity cost using the production possibilities curve (PPC) model. a. There are 10 workers in Thailand and each can produce either 2 computers or 30 tons of rice. He consumes two commodities, Coke and chips. a. Full-employment policies b. Assume the production possibility frontier for guns (G) and better (B) is given by G^2 + 2B^2 = 900. If the slope of the PPC is 2, the opportunity cost... Why does the production possibilities curve bowed-out in shape? Production takes place over a specific time period-for example, one year, c. R... A nation's production possibilities curve is "bowed out" from the origin because a. resources are not perfectly adaptable to the production of alternative goods. For this model, imagine the following scenario: You are stranded on a tropical island alone. b. Both represent the same mix of tank and automobiles B. Australia can produce 36 thousand tonnes of apple or 12 thousand tonnes of orange in a year. e) Unemployed resources. The production possibilities frontier (PPF) shows the combinations of two products that may be produced in a particular time period with available resources. b. a. Harmony Company has current sales of $940,000. better known as the PPF. b. shifts to the left. Impossible even with technological progress, c. Possible but inefficient, d. Possible and efficient. False. A. c. inward rotation along the x-axis. B. an improvement in technology. 1. If each country specializes in the good in which it has a comparative advantage, Blank will gain from trade because Blank. If this economy wanted to produce the combination of 900 shirts and 600 pants, the economy would have to: A. begin using its available resources more efficiently than it is currently using them. The country of Ruritania produces widgets and gizmos. You are allowed two attempts. Earn Transferable Credit & Get your Degree.
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