1 Answer Konstantinos Michailidis Sep 24, 2015 Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. 80. The straight downward-sloping line is the production possibility frontier. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. If opportunity costs are constant, the production possibilities frontier is graphed as a _____. The production possibilities frontier (PPF) is curved because the cost of production is not constant. The main reason for a straight line production possibility frontier is that … c. need to select among the points making up the PPF. guns) is more than enough to overcome depreciation, and the level of capital available in the future will be greater than the level available today. 120. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. c. the rate of tradeoff between the two goods being produced is constant. B) the two products must have the same price. b) diseconomies of scale. 40. Solved: Two nations have straight-line production possibility frontiers, but with different slopes. Where does the PPF come from? But the direction that PPF is curved comes from the way that the trade-offs change. The reason for these straight lines was that the slope of the budget constraint was determined by relative prices of the two goods in the consumption budget constraint. d. straight-line … Within the production possibilities frontier (PPF) framework, choice is depicted by the Select one: a. PPF itself. Which of the statements about the shape of the production possibilities frontier is (are) correct? A production possibilities frontier that is a downward- sloping straight line implies a) no economies of scope. Assume that the production possibilities frontier is a straight line. When using resources to produce one of the two items those resources cannot be used to make the second item. The production possibilities frontier (PPF) is a simple model designed to depict the production capabilities of an economy given current resources. c) economies of scale. Production Possibility Frontier . Start out with a graph of two things a country produces. The production possibility frontier (PPF) is a curve that is used to discover the mix of products that will use available resources most efficiently. If a production possibilities frontier is a straight line, then production occurs under conditions of A. constant opportunity costs. B. increasing opportunity costs. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. It comes from the production processes for producing the two goods, and the limited amounts of resources available to use for that purpose. the A production possibilities frontier will be a straight line if_____.A. The production possibilities frontier is concave to the origin because of the law of increasing costs. 40. b. an economy is interdependent and engaged in trade instead of self-sufficient. The PPF assumes: Output is limited to two broad classes of products: Consumer goods and capital goods. b. an economy is interdependent and engaged in trade instead of self-sufficient. Answer link. Question 1 A production possibilities frontier is a straight line when Not yet answered Select one: Points out of 1.00 a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Explanation: The Production possibilities frontier is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised. E. Nations would do better by producing toward the middle of their production possibilities frontiers as opposed to the extreme points near the axes. 6. However, the production possibilities frontier for healthcare and education was drawn as a curved line. (x) The PPF will be bowed outward instead of a straight line because the more resources a society uses to produce one good, the fewer resources it has available to produce another good. C) the opportunity costs of the products are constant. 30. If every trade-off were the same, it would create a straight line. D) there are no opportunity costs. If the amount produced is inside the curve, then all of the resources are not being used. E. None of the above. b. an economy is interdependent and engaged in trade instead of self-sufficient. The straight downward-sloping line is the production possibility frontier. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. It forms a shape that looks like a cave or a rainbow. Health care is shown on the vertical (or y) axis, and education is shown on the horizontal (or x) axis. A concave curve is one that bends outward from the origin. Chairs. Related questions. c.the rate of tradeoff between the two goods being produced is constant. A production possibilities frontier is a straight line when a.the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. ANS: The PPF is typically bowed-outward due to the law of increasing opportunity costs. It describes all possible quantity combinations of wine and cheese that can be achieved by the U.S. economy. As more of a product is produced, it becomes increasingly more difficult to find resources that are well-suited to producing that product. 20. A. increasing the production of one good by x units entails no opportunity cost in terms of the other good. Use the following to answer questions 28-29: 28. c. the rate of tradeoff between the two goods being produced is constant. b.an economy is interdependent and engaged in trade instead of self-sufficient. The economy’s resources are fixed in quantity and quality over this period. Production takes place over a given time period. increasing the production of one good by x unitsentails no opportunity cost in terms of the other goodD. 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. ... -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). The Production Possibilities Frontier . Solution: (C) Difference between a straight line and a curved production possibility: 1. 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. 0. Why does the PPF have a different shape? 27. Let's assume that the blue line on the graph above represents today's production possibilities frontier. 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