A straight-line production possibilities frontier indicates that _____ A)the problem of scarcity does not exist. Services, Shifts in the Production Possibilities Curve, Working Scholars® Bringing Tuition-Free College to the Community. Do you remember Charlie choosing combinations of burgers and bus tickets within his budget constraint? C. the rate of tradeoff between the two goods being produced is constant. Consider the production possibility frontier for a... On the topic of Economic growth: i. B. an economy is interdependent and engaged in trade instead of self-sufficient. In reality, however, opportunity cost doesn't remain constant. This straight frontier line indicates a constant opportunity cost. A production possibilities frontier that is a straight line is the result of: constant opportunity costs. Opportunity cost is always present C. The opportunity cost of producing a good decline as more is produced D. Resourses used in production of one good cannot be used in production of another 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. good Y produced, then its production possibility frontier is: The fact that a society's production possibility frontier is bowed out, or concave to the. The most obvious benefit of specialization and trade is that they allow us to consume more goods than we otherwise would be able to consume. A. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Comment on the following statement. The opportunity cost of producing one more extra unit of Good B is: -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). C. implies that prices will rise when the costs of making a good rise. The economy's factors of production are not equally suitable for producing different types of goods. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. B)resources are imperfect substitutes. c. The straight-line boundary does not show scarcity, whereas the concave boundary does. This principle generates: Use the following to answer questions 35-37: (Figure: Strawberries and Submarines) Use Figure: Strawberries and Submarines. If a production possiblity frontier is a straight line, it tells us that the opportunity cost of.....? © copyright 2003-2021 Study.com. The correct statement is b. His opportunity cost reflects that for every bit of additional time … Suppose the economy is operating at point. The first is the fact that the budget constraint is a straight line. The points from A to F in the above diagram shows this. The production possibilities curve will shift... 1. She could alternatively use that hour of time to type a legal brief in her office. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. If a production possibility frontier was a straight line, ... possibility frontier, which shows what the economy can consume rather than what it can produce. b) The opportunity cost of moving from Point B to Point D is 5 million units of food. -The PPF shows all combinations of two goods that an economy can possibly produce, given its resources and technology.-The PPF illustrates the concepts of tradeoff and opportunity cost, efficiency and inefficiency, unemployment, and economic growth.-A bow-shaped PPF illustrates the concept of increasing opportunity cost. Use the following to answer questions 28-29: 28. Points within the curve show when a country’s resources are not being fully utilised answer! Students learn the basic economic concept of opportunity cost and draw a production possibilities frontier to learn the constraints a society faces when deciding what to produce. This production possibilities frontier shows a tradeoff between devoting social resources to healthcare and devoting them to education. In the beginning, the opportunity cost of producing whatever is on the x axis is relatively low in terms of the y axis. types of goods. 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). Economists typically depict the production possibilities frontier as a bowed curve rather than as a straight line in order to show that: A. All other trademarks and copyrights are the property of their respective owners. The opportunity cost is constant, c. The opportunity cost is increasing, 27. This preview shows page 6 - 9 out of 76 pages. 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. C.concave, A Straight Line. In other words, a curved production possibility frontier shows us that along the production possibility frontier, the opportunity cost isn't constant. Schedule II. producing one more unit of good X: A) ... impact of the tension between cost minimization and quality maximization? Opportunity cost is the value or benefit of the next best alternative given up when making a choice. Good and much of each good the economy experiences economic growth or production possibilities frontier with a outward. more of both goods could be produced moving along the frontier. The opportunity cost would be the health care that society has to give up. Become a Study.com member to unlock this A lawyer can argue a case in court for one hour and make $300. 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