Discuss the following indicators of the production-possibility curve. Include diagrams. 1) Efficiency 2) Opportunity Costs 3)...

Discuss the following indicators of the production-possibility curve. Include diagrams.

1) Efficiency

2) Opportunity Costs

3) Marginal Rate of Transformation

4)Shape

5)Position

Expert Solution

1) efficiency implies that resources are fully utilised, which is achieved when combination of two goods, x and y is produced which is in the production possibility curve. This is so because combination of output is produced which is below the curve resources are not fully utilised. Outside the curve resources are not enough to produce.

2) . Opportunity cost at point A is high because already less of x is produced, and producers are not willing to give up more x. Opportunity cost at point B is low because high level of x is produced.

3) marginal rate of transformation is the rate at which units of one good has to be sacrificed to produce one more unit of another good. Slope of production possibility curve gives marginal rate of transformation, AA gives MRTS.

4) Shape of production possibility curve is bowed out or concave because of increasing opportunity cost. MRTS increases as we move from top left to bottom right.

5) position of the curve is determined by technology level. Increase in technology shifts the position of the curve to the right as shown in first diagram.

Rahul Sunny answered 1 year ago

1) An autarkic country has a production possibility curve with constant opportunity costs such that it...

1) An autarkic country has a production possibility curve with constant opportunity costs such that it can produce at most 210 units of silk, or at most 70 units of kerosene. Suppose this country is currently producing 56 units of kerosene and 42 units of silk, and decides instead to produce 69 units of silk; how much kerosene will it produce?___ 2) Consider the production possibility curves for England and Portugal. Each country can produce cloth or wine. England can...

Discuss how does a PPC (Production possibility curve) explain the concepts of tradeoffs (opportunity cost), attainable...

Discuss how does a PPC (Production possibility curve) explain the concepts of tradeoffs (opportunity cost), attainable and unattainable output combinations, and efficiency. What kinds of decisions would make a PPF expand over time? What kinds of decisions would make it contract over time?

Why is the production possibility curve bowed out? Why is there an increasing opportunity cost of...

Why is the production possibility curve bowed out? Why is there an increasing opportunity cost of a good as more of it is produced? Explain why does an increase in supply lead to lower prices?

Economics is about scarcity,chioce and opportunity cost.with aid of a diagrams using a production possibility frontier,explain...

Economics is about scarcity,chioce and opportunity cost.with aid of a diagrams using a production possibility frontier,explain theses and also highlight the importance of this model in understanding economics. use citation of refertences using harvard way of writing.

2. Draw an increasing opportunity cost Production Possibility Frontier and mark 1. The point that shows...

2. Draw an increasing opportunity cost Production Possibility Frontier and mark 1. The point that shows inefficient production 2. Efficient Production 3. Point of production that cannot be achieved. 3. In the following questions, draw the graph and answer in words. (5 points each) a) Draw a demand curve for pizza and show what happens when price of pizza falls. b) Assuming pizza to be a normal good, show what happens when income increases. c) If beer is a complementary...

compare and contrast between production and allocative efficiency between perfect competition and monopoly. please include diagrams...

compare and contrast between production and allocative efficiency between perfect competition and monopoly. please include diagrams in your explanations.

Using the production possibility frontier graph and explains the following concepts. Unemployed resources Scarcity Production efficiency...

Using the production possibility frontier graph and explains the following concepts. Unemployed resources Scarcity Production efficiency Opportunity cost Economic growth

Discuss the following as they relate to profit maximization. 1) cost curve 2) elasticity 3) pure...

Discuss the following as they relate to profit maximization. 1) cost curve 2) elasticity 3) pure competition 4) monopoly 5)monopolistic competition 6) oligopoly

Draw a Production Possibilities Curve showing increasing opportunity costs. Label the axes Consumer Goods and Capital...

Draw a Production Possibilities Curve showing increasing opportunity costs. Label the axes Consumer Goods and Capital Goods Draw a point on your graph to show an efficient production level (label this point E) Draw a point on your graph to show an inefficient production level (label this point I) Draw a point on your graph to show where you think the US economy is currently operating. Show economic growth on your graph and explain how economic growth occurs.

20)Product costs: 1. include only the prime costs of manufacturing a product. 2. include only the...

20)Product costs: 1. include only the prime costs of manufacturing a product. 2. include only the conversion costs of manufacturing a product. 3. are expensed when products become part of finished goods inventory. 4. are regarded as assets before the products are sold. 5. exclude fixed factory overhead. 21)Dividends in arrears: 1. Must be disclosed in the notes to the financial statements. 2. Must be reported in the liabilities section of the balance sheet. 3. Are expenses that are reported...

Question