Why Societies Cannot make a choice above their production possibilities frontier and should not make a choice below?
A society should not make a choice below it as this is productively inefficient and wasteful because it is possible to produce more of one good, the other good, or some combination of both goods.
How does the production possibilities frontier illustrate choice?
Opportunity cost can be illustrated by using production possibility frontiers (PPFs) which provide a simple, yet powerful tool to illustrate the effects of making an economic choice. A PPF shows all the possible combinations of two goods, or two options available at one point in time.
What is it called when individuals Cannot have everything they want and must instead make choices society as a whole Cannot have everything it might want either?
Just as individuals cannot have everything they want and must instead make choices, society as a whole cannot have everything it might want, either. This section of the chapter will explain the constraints society faces, using a model called the production possibilities frontier (PPF).
Why is a production possibility frontier typically drawn as a curve rather than a straight line?
The shape of the PPF is typically curved outward, rather than straight. All choices along a production possibilities frontier display productive efficiency; that is, it is impossible to use society’s resources to produce more of one good without decreasing production of the other good.
Why is PPC downward sloping and concave to the origin?
Answer: PPC is concave to the origin because of increasing Marginal opportunity cost. This is because inorder to increase the production of one good by 1 unit more and more units of the other good have to be sacrificed since the resources are limited and are not equally efficient in the production of both the goods.
What is the shape of a PPC curve?
The shape of a production possibility curve (PPC) reveals important information about the opportunity cost involved in producing two goods. When the PPC is a straight line, opportunity costs are the same no matter how far you move along the curve.