Ch. Question 17. The Production Possibilities Frontier . 2.5 out of 2.5 points . 50 150 60 80. d. scarcity. a. constant opportunity costs. A PPF is bowed outward as a result of. This is a result of transferring resources from the production of one good to another according to comparative advantage. as we move down the PPF, as more resources are allocated towards Good Y the extra output gets smaller – so more of Good X has to be given up in order to produce Good Y; This is an explanation of the law ofdiminishing returns and it occurs because not all factor inputs are equally suited to producing items An outward shift of the production possibilities curve represents a. economic growth. b. inward shift of the PPF. decreasing opportunity costs. This means that the opportunity cost of cars in terms of computers depends on how much of each good the economy is producing. A PPF … 33) The nationʹs production possibilities frontier is bowed outward. c. decreasing opportunity costs. A concave curve is one that bends outward from the origin. It is because opportunity cost increases that the PPF is concave to the origin (bowed outward) rather than being a straight line. To produce more good B,it has to give up more good A. Refer to Exhibit 2-9. ANSWER: b 70. d. 50 150 60 80. Answer to: Why are Production Possibilities Curves often bowed outward from the origin? a. constant opportunity costs. 2 - What condition must hold for the PPF to be bowed... Ch. Which of the following best describes one of three economic concepts illustrated by the production possibilities boundary? This is the currently selected item. a. production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war. The PPF may retract or expand depending on circumstances. 1 Answer to A bowed out PPF reflects which of the following ideas? When using a PPF, growth is defined as an increase in potential output over time, and illustrated by an outward shift in the curve. 100 0 120 0. Now you want to consider raising 200 llamas (which means moving to point B). Notice that the production possibilities frontier in the above graph is bowed outward. d. A. is done on EduRev Study Group by Class 12 Students. B) the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. To Bowed shape PPF means the opportunity cost is increasing. Many economic concepts and problems can be represented using a PPF/PPC, such as productive efficiency, allocation, opportunity cost, limited or scarce resources, and the like. A production possibilities frontier with a bowed outward shape indicates an increase in opportunity costs as more and more of one good is produced. increasing opportunity costs. If a production possibilities frontier (PPF)is concave outward,it follows that A) opportunity costs are constant between two goods. b. PPF after the war has probably shifted to the left compared to its PPF prior to the war. Exhibit 2-9Alex Adam. b. increasing opportunity costs. choice. d. more resources. A production possibilities frontier with a bowed outward shape indicates an increase in opportunity costs as more and more of one good is produced. If the PPF shifts rightward and the population doesn't change, what rises. A PPF/PPC representation can take the shape of a concave or a straight line, (aka “linear”), depending on the elements and factors being taken into the equation. 0 300 0 160. Lesson summary: the production possibilities frontier. scarcity. The production possibilities frontier (PPF for short, also referred to as production possibilities curve) is a simple way to show these production tradeoffs graphically. When the economy is using most of its resources to make cars, the production possibilities frontier is quite steep. Exhibit 2-9Alex Adam. 2.5 out of 2.5 points. In business analysis, the production possibility frontier (PPF) is a curve illustrating the varying amounts of two products that can be produced when both depend on the same finite resources. Straight-line PPF means marginal rate of transformation or opportunity cost is constant.All factors can use to produce any goods. 75 75 90 40. Practice: Interpreting graphs of the production possibilities curve (PPC) Thus in Fig 1.1 as the society moves from point C to D to E, the amount of food sacrificed rises for each additional unit of cloth produced. c) The PPF is bowed outward due to the law of increasing opportunity costs. Using a bowed outward production possibilities curve between ice cream and hammers, identify graphically the opportunity cost of obtaining an additional hammer. A PPF is bowed outward as a result of. An outward shift of a PPF means that an economy has increased its capacity to produce all goods. Imagine you are producing at point A in the graph of part a). c. ... 57. 75 75 90 40. Chapter 2—Production Possibilities Frontier Framework - Subject General Questions - 00039588 ... be a bowed-outward curve. These tradeoffs are present both in individual choice and in the production decisions of entire economies.. One cause could be the effects of natural disasters such as drought, earthquakes or severe floods which destroy built-up capital and potentially causes significant loss of life. increasing opportunity costs. 25 225 30 120. Answers: constant opportunity costs. e. choice. PPCs for increasing, decreasing and constant opportunity cost. 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. a) High speed steel b) Aluminum oxide c) Titanium aluminum oxide d) Polycrystalline diamond... Will an increase in average length of annual vacations cause the national economy's PPF to shift inward or outward? State its economic value in the context of production possibilities frontier. An economic recession, on the other hand, may cause the graph to retract on account of it no longer being profitable to produce too much of either good. As a result, the country's. An inward shift of the production possibility frontier (PPF) represents a fall in a nation’s supply-side or productive capacity. scarcity. Answers: constant opportunity costs. Home All Posts... in general, production possibilities curves are "bowed out" because: c. decreasing opportunity costs. decreasing opportunity costs. Good A Good B Good A Good B. 2 - Look back at Exhibit 4 and notice that the slope... Ch. The PPF is typically bowed-outward due to the law of increasing opportunity costs. choice. c. PPF after the war is probably the same PPF as before the war. 0 300 0 160. 100 0 120 0 . 2 - Give an example to illustrate each of the... Ch. A PPF is bowed outward as a result of. A PPF is bowed outward as a result of. The result is that the PPF is typically bowed-outward due to the law of increasing opportunity costs. A factor which is good to produce good A,might not be good for good B. C)a point outside the production possibilities frontier. As more of a product is produced, it becomes increasingly more difficult to find resources that are well-suited to producing that product. One of the central principles of economics is that everyone faces tradeoffs because resources are limited. b. increasing opportunity costs. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of A business that upgrades its bread-making equipment, for example, will have its production possibility curve shift outward. 25 225 30 120. Notice that this production possibilities curve, which is made up of linear segments from each assembly plant, has a bowed-out shape; the absolute value of its slope increases as Alpine Sports produces more and more snowboards. There you produce only grapes using all of your land. Question 17. In the real world there are several events that can occur that would cause the PPF to shift, or cause changes in its shape. We normally draw a PPF on a diagram as concave to the origin i.e. Refer to Exhibit 2-9. A Production Possibilities Frontier Will Be Linear And Not Bowed Out If Good A Good B Good A Good B. 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