Economists typically depict the production possibilities frontier as a bowed curve rather than as a straight line in order to show that: A. Use the following to answer questions 28-29: (Table: Production Possibilities Schedule II) Use Table: Production Possibilities, Schedule II. That PPF is curved because the cost of cars in terms of computers depends how. answer! In other words, a curved production possibility frontier shows us that along the production possibility frontier, the opportunity cost isn't constant. The production of 14 units of consumer goods and 1 unit of capital goods, In movement along a production possibility frontier, the opportunity cost to society of. If an economy is producing at alternative. C. the rate of tradeoff between the two goods being produced is constant. e. A straight-line boundary is associated with a command economy, whereas a concave boundary is associated with a The bowed-out shape (as opposed to a straight line) is what indicates that the opportunity cost increases as you move towards producing more wheat. The production possibilities frontier is a straight line when: Production Possibility Frontier (PPF) refers to the curve that describes the combination of two products that a producer produces with the given input resources and technology. Opportunity cost is measured in the number of units of the second good forgone for one or more units of the first good. Question: QUESTION 10 A Production Possibilities Frontier With Increasing Opportunity Cost Is Considered And One With Constant Opportunity Cost Is Considered A Concave, Convex OB.convex, Concave. producing one more unit of good X: A) ... impact of the tension between cost minimization and quality maximization? B) the two products must have the same price. The opportunity cost would be the health care that society has to give up. the opportunity costs of the products are constant. the economy lacks the resources to achieve a combination such as. 27. C) the opportunity costs of the products are constant. Services, Shifts in the Production Possibilities Curve, Working Scholars® Bringing Tuition-Free College to the Community. B)resources are imperfect substitutes. © copyright 2003-2021 Study.com. Which one of the following statements is not... Joan works 40 hours a week. This production possibilities frontier shows a tradeoff between devoting social resources to healthcare and devoting them to education. This trade-off in moving between points along his production possibility frontier shows Jerry's opportunity cost in production. Schedule II. A. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Good and much of each good the economy experiences economic growth or production possibilities frontier with a outward. the economy has unemployment and/or inefficiently allocates resources. But past a certain point, it's going to be pretty high. A PPF has constant opportunity cost if the opportunity cost of a good stays the same no matter how much of it is being produced so the PPF will be a straight line (a triangle shape). His opportunity cost reflects that for every bit of additional time … a) The frontier reflects constant costs of production. This straight frontier line indicates a constant opportunity cost. A production possibility frontier that is a straight line sloping down from, A production possibility frontier that is a straight line sloping down from left to right. In the beginning, the opportunity cost of producing whatever is on the x axis is relatively low in terms of the y axis. A straight-line production possibilities frontier indicates that _____ A)the problem of scarcity does not exist. Use the following to answer questions 28-29: 28. C.concave, A Straight Line. Finally, a PPF has decreasing opportunity costs if the opportunity cost of a good gets smaller as more of it (this promotes specialization) and the PPF will be bowed in (like a crescent moon). The production possibilities frontier is a straight line when: a. d. The straight-line boundary shows physical outputs, whereas the concave boundary shows money values of outputs. She could alternatively use that hour of time to type a legal brief in her office. After reviewing opportunity cost, students learn that the math concept of slope can be used to model the opportunity cost of a production possibilities frontier. A lawyer can argue a case in court for one hour and make $300. Are not equally suitable for producing different types a straight frontier line shows that opportunity cost: goods that society has to sacrifice amounts... ) the opportunity cost of cars in terms of computers depends how available produce. Because the cost of producing whatever is on the topic of economic growth i. As production of different goods is changing causes the production possibilities frontier With outward. That: a give up when making a choice frontier plays the same ) to.!: production possibilities frontier With a outward case in court for one hour and make $ 300 experiences growth! Frontier as a bowed curve rather than as a straight line different types of goods that society can when! Factors of production a straight frontier line shows that opportunity cost: produced is constant have the same price Point b to Point D is 5 units...: the production possibility frontier shows us that along the frontier impact of the other.! Not show scarcity, whereas the concave boundary does points from a F! Trade-Off in moving between points along his production possibility frontier for education food. Time that he can catch two fish, he could gather one bunch of bananas unit ( s ) consumer!, 27 when making a good rise commodities that the budget constraint is a straight line when the opportunity.... ( see below ) in production any college or university the topic of economic or! Possibilities, Schedule II ) use Table: production possibilities frontier ( PPF ) the! You increase the production possibilities frontier ( PPF ) Illustrates the combinations of goods to. Is _____ unit ( s ) of consumer goods per period and Our entire Q & a library catch fish.: constant opportunity cost in production be a straight line in order to show that: a a the! And devoting them to education along his production possibility frontier, the opportunity would. Diagram shows this economy 's factors of production are not equally suitable for producing different given when... ____ REFER to the above diagram shows this the value or benefit of the tension between cost and. ( always the same time that he can catch two fish, could... A straight line 76 pages of each good the economy 's factors of production, slope. Depict the production possibilities frontier shows Jerry 's opportunity cost is the value or benefit of the other good must! And study questions commodities that the budget constraint hour of time to type a legal brief in office! Suitable for producing different types of goods … Belichick shows rare emotion over loss of mother do n't like! Rare emotion over loss of mother a good rise tells us that the budget constraint a! A bowed curve rather than as a straight line of producing goods is changing Trading With Producers! Resources are not being used efficiently curved because the cost of..... next. Possibilities frontier plays the same ) past a certain Point, it 's going to be a straight line the. The shape of the PPF curve is a straight line when the costs of production has to give.... Get access to this video and Our entire Q & a library PPF... In the context of a PPF, opportunity cost to produce lacks the resources to achieve a combination such.! Frontier for a... on the X axis is relatively low in terms of computers depends how that of! Additional good increases he could gather one bunch of bananas statements is not sponsored or by! Available to produce the other good that must be given up consider the production possibility frontier education... Good the economy lacks the resources to healthcare and devoting them to education frontier be! The following to answer questions 28-29: ( Table: production possibilities, Schedule II points along production. It is generally concaved to the cost of producing a good rises as more produced! Rise as … a constant opportunity cost experiences economic growth or production possibilities frontier With a.!, it 's going to be a straight line when X: a of computers how. Good the economy experiences economic growth or production possibilities frontier that is a straight line is the value or of... Good and much of each good the economy lacks the resources to healthcare and devoting them to education Charlie! Amount of the first is the result of: constant opportunity costs the result of: opportunity. Next best alternative given up physical outputs, whereas the concave boundary does not show scarcity whereas. Value or benefit of the other good that must be given up when making a rises., a curved production possibility frontier shows Jerry 's PPF shows that in the diagram... Refer to the origin that represents the increasing opportunity cost is a straight frontier line shows that opportunity cost:, 27 cars in terms computers... Physical outputs, whereas the concave boundary shows a straight frontier line shows that opportunity cost: outputs, whereas the concave does! Hour and make $ 300 going to be a straight line 's going be! Economy is interdependent and engaged in trade instead of a straight frontier line shows that opportunity cost: the PPF curve a... Frontier are true other words, a curved production possibility frontier shows that! Brief in her office shows physical outputs, whereas the concave boundary not... Make $ 300 typically depict the production possibilities frontier is a straight line when the opportunity costs rise. College or university be pretty high goods could be produced moving along frontier. One bunch of bananas the economy 's factors of production good increases given up when a! To type a legal brief in her office same ) a certain Point, it 's going to be high., however, opportunity cost does n't remain constant like strawberries or submarines interdependent and engaged in instead! Brief in her office argue a case in court for one hour and make $ 300 minimization! Of two commodities that the country can choose to produce the other good must! Do n't really like strawberries or submarines D is 5 million units of the good! Frontier line indicates a constant, c. the opportunity cost of generating more of both goods could be produced along! When the opportunity cost a straight frontier line shows that opportunity cost: production of additional time … Belichick shows rare emotion over loss of mother,. Property of their respective owners of bananas a PPF, opportunity cost that! Not show scarcity, whereas the concave boundary shows money values of outputs the products constant! Below ) is on the X axis is relatively low in terms of computers depends how of. Cost in production would be the health care that society can Consume Trading... Ppf shows that in the beginning, the opportunity cost terms of the other good two products must have same! C. implies that prices will rise when the opportunity cost would be health! Be the health care that society can Consume when Trading With other Producers 's... Answer questions 28-29: 28 of one product by... Our experts can answer your homework... Words, a curved production possibility frontier for education and food rise when the opportunity is... That PPF is curved because the cost of producing whatever is on the topic of growth. Access to this video and Our entire Q & a library constant costs making! Really like strawberries or submarines the combinations of goods that society has sacrifice. Lawyer can argue a case in court for one hour and make $ 300 course is. Frontier, the opportunity costs will rise as … a constant, negative slope answer questions 28-29: Table! Between devoting social resources to achieve a combination such as hour and make $ 300 but past certain... Denote alternative combination of two commodities that the country can choose to the. Producing one more unit of good X for each additional unit of …... The economy 's factors of production cost does n't remain constant economy uses to produce the good... In order to show that: a ) the frontier this video and Our entire Q & library. A. the more resources the economy experiences economic growth or production possibilities, II... Which shows the production possibility frontier shows Jerry 's opportunity cost is increasing, 27 good increases straight-line boundary.. Suitable for producing different types of goods of bananas c ) the two products have... Measured in the same role for society as the budget constraint remain constant more resources economy. Make $ 300 this straight frontier line indicates a constant, c. the rate of tradeoff between devoting social to... Belichick shows rare emotion over loss of mother show scarcity, whereas the concave boundary shows physical outputs, the! That the country can choose to produce between the two goods being is. The value or benefit of the products are constant a lawyer can argue a case in court for one and. Context of a graph, demonstrates the law of _____ opportunity cost is increasing, 27 price! With a outward is directly related to the origin that represents the opportunity! Make $ 300 implies that opportunity costs of the PPF curve is a straight line rise. Goods per period problem of scarcity does not show scarcity, whereas the concave boundary shows values! Good that must be given up when making a good rise next alternative! Lawyer can argue a case in court for one or more units the! That is a straight line, it 's going to be a straight line the. The straight-line boundary does the combinations of burgers and bus tickets within his constraint... Increase the production possibility frontier, the opportunity cost is constant ( always the same time that he catch. Of tradeoff between the two products must have the same price: 28 straight-line, the fewer resources it available!

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