What is the best description of the production possibilities curve?
The PPF is a curve showing alternative combinations of goods that can be produced when available resources are used efficiently.
How is opportunity cost involved with the production possibilities curve?
when the opportunity cost of a good remains constant as output of the good increases, which is represented as a PPC curve that is a straight line; for example, if Colin always gives up producing 2 fidget spinners every time he produces a Pokemon card, he has constant opportunity costs.
What are the different types of physical capital?
There are two types of physical capital: fixed capital and working capital. Fixed capital includes those assets which can be used over many years in the process of production like machines in factory, building, tools etc.
What are the items come under physical capital?
Answer: The machinery, buildings, office or warehouse supplies, vehicles, and computers that a company owns are all considered part of its physical capital.
What is the purpose of a production possibilities frontier?
In business analysis, the production possibility frontier (PPF) is a curve illustrating the varying amounts of two products that can be produced when both depend on the same finite resources. The PPF demonstrates that the production of one commodity may increase only if the production of the other commodity decreases.
How is opportunity cost shown on a production possibilities frontier quizlet?
Opportunity cost is represented by the slope of the frontier or can be viewed as how much we give up of one good to get one more unit of another good. Productive efficiency is represented by points on the frontier.
How can a production possibilities frontier be used to illustrate economic growth quizlet?
A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. A country would require an increase in factor resources, an increase in the productivity or an improvement in technology to reach this combination.
How does a production possibilities frontier show efficient uses of a country resources?
In macroeconomics, the PPF shows the point in which a country’s economy is at its most efficient, producing consumer goods and services by optimally allocating resources. It considers production factors and determines the best combinations of goods.
Which one of the following would likely shift a production possibilities frontier inward?
30. The correct answer is A. The PPF frontier will shift inward in the event of a drought, or any other scenario where resources are not used efficiently.
How can the production possibilities frontier shift outward quizlet?
the nation is not using all available resources or is using inferior technology or both. there is a technological improvement. A production possibilities frontier shifts outward when. the economy experiences economic growth.
What may cause the production possibilities of an economy to shift outward?
Outward or inward shifts in the PPF can be driven by changes in the total amount of available production factors or by advancements in technology. If the total amount of production factors like labor or capital increases, then the economy is able to produce more goods at any point along the frontier.
When a production possibilities frontier is bowed outward?
A production possibilities curve shows the combinations of two goods an economy is capable of producing. The downward slope of the production possibilities curve is an implication of scarcity. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage.
What’s the four factors of production?
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship.
What is another term for factors of production?
The factors are also frequently labeled “producer goods or services” to distinguish them from the goods or services purchased by consumers, which are frequently labeled “consumer goods”. There are two types of factors: primary and secondary.
Are factors of production scarce in every society?
Scarce in every society. The production-possibilities curve bows outward because: Resources are scarce and choices must be made.