efficiency is illustrated by ppf

9. 22. 118. One of the central principles of economics is that everyone faces tradeoffs because resources are limited. Production points inside the curve show an economy is not producing at its comparative advantage. b. neither the production possibilities frontier nor the circular-flow diagram. 3. The production possibilities frontier can illustrate two kinds of efficiency: ... Any time a society is producing a combination of goods that falls along the PPF, it is achieving productive efficiency. \n. When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good a. increases as more of the good is produced. A)a point inside the production possibilities frontier. Scarcity is illustrated by the existence of the frontier: if there were unlimited resource availability, there would be no limit on output. Resources must be somewhat specialized, so that the law of increasing opportunity costs holds. Which of the following concepts is NOT illustrated by the production possibilities frontier? 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. Because people have varying abilities in producing different goods. In contrast, if the economy is operating below the curve, it is said to be operating inefficiently because it could reallocate resources in order to produce more of both goods or … Efficiency is illustrated by a. both the production possibilities frontier and the circular-flow diagram. D. 3. PPF primarily represents a hypothetical boundary between the maximum combination of goods and services that an economy can produce with the available resources and technology. 1.3 Efficiency is illustrated by... a) Points beyond the PPF curve b) Points along the PPF curve c) Points within the PPF curve d) None of the above 1.4 South African companies are shifting towards, capital intensive production processes. Explain how the following can be represented in a PPF framework: the finiteness of resources implicit in the scarcity condition. There must be complete interchangeability of resources, with no specialization, so that the law of increasing opportunity costs does not apply. Like most models, the PPF reflects a simplified version of reality. With specialized resources, additional units of a good can only be produced at increasing opportunity costs. If the price of cheese falls by one percent and the quantity demanded rises by 3 percent, then the price elasticity of demand for cheese has a value of A. The situation where someone can produce a good at lower opportunity costthan someone else can, Producing goods in which you have a comparative advantage. production possibilities frontier (PPF) ... allocative efficiency is achieved by producing the amount of a good such that the marginal benefit of the last unit produced exceeds its marginal cost by as much as possible. Production possibilities frontier (PPF) ... productive efficiency and fully employed resources. B) Production efficiency occurs when production is on the frontier itself. All choices along the curve shows production efficiency of both goods. Actual production in the country was below the PPF with the high unemployment rate, the decrease in unemployment will expand actual production back to a level on the PPF, How would this affect a PPF in the U.S.: a law that requires individuals to enter lines of work for which they are not suited, The country will not produce at a level on the PPF because people's skills are being misapplied and underutilized, Explain how the following can be represented in a PPF framework: unemployed resources. Choice is illustrated by the variety of possible combinations along the frontier: there is not a single optimum or efficient combination of the two goods. Efficiency is illustrated by O both the production possibilities frontier and the circular-flow diagram. The condition where less than the maximum output is produced with given resources and technology. 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