Question

Select a relevant microeconomics industry and discuss how it relates to the PPF. Consider why countries engage in international trade and how that country aligns with the PPF concept. Choose a topic that explores one or more factors of production and how they relate to the PPF.

Locate a recent article or event (published within the last year) that highlights your relevant microeconomics topic. Use newspapers, new stations, or other credible sources to discuss how your topic aligns with microeconomics.

Include the following in your discussion: State the article or event you selected. Identify the microeconomic concept(s). Describe your findings. Analyze the relevance to real-life applications. Summarize your findings using at least 250 words and provide a minimum of one reference. Use current APA formatting to document your sources.

Answer 1

State the article or event you selected:
In international trade countries are gain .International trade is exchange of goods and services across international borders.Countries should produce goods when domestic opportunity cost is low than the domestic opportunity cost of other countries and exchange those goods with those which have high opportunity cost compared to other countries.Without trade each country will consume what it produces. PPF shows total quantity of two goods that an economy can produce with given resources.

Ientify the microeconomic concept(s):
The micro economic concepts here are scarcity, opportunity cost , free trade(trade without barriers) ,underutilization of resources,efficient use of resources, comparative advantage(ability to produce a commodity at a low cost), absolute advantage(difference in productivity of countries).

Describe your findings:
production possibility frontier extends outward from the origin . The economy that is operating on the PPF is producing efficiently.If the economy is operating below the curve it is operating inefficiently.Points outside the curve are not attainable with existing resources and technology if trade does not take place with an outside .producer.If there is technological progress the PPF will shift outwards Again PPF will shift inwards if supply of raw materials and labor is less .

Analyze the relevance to real-life applications:
PPF real life application is quite obvious when one product takes resources from another..An economy can face a choice between education and health care.If the country has ageing population like Japan they might want to invest in health care but with growing population like India , an economy would like to invest on education.