What two concepts are illustrated by a production possibility curve?
The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.
What are the two types of production possibility curves?
In total, there are 3 types of production possibility curves. Namely, straight line sloping down, concave and convex. When the line is sloping downwards, it shows that there will be less production of one good and more of the other which will always remain constant. This is because the curve has a negative gradient.
What is production possibility explain the concept of production possibility curve?
A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical …
What is the production possibilities curve based on?
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 is a production possibilities curve quizlet?
production possibilities curve. a graph or economic model that shows the maximum combinations of goods and services, any two categories of goods, that can be produced from a fixed amount of resources.
Which of the following is illustrated by a production possibility frontier?
The production possibilities frontier can illustrate two kinds of efficiency: productive efficiency and allocative efficiency.
What is the production possibilities curve quizlet?
What does a production possibilities curve show us quizlet?
The PPF curve shows the specified production level of one commodity that results given the production level of the other. It assumes the maximum possible efficient use of the resources for a maximum possible production of both commodities. represent maximum output of the two products and choice.
What does each point on a production possibilities curve show quizlet?
Every point on the production possibilities curve is a point of efficiency. When we cannot produce more of any one good without giving up some other good, we have achieved productive efficiency, and we are producing at a point on the PPF. service is the opportunity cost of producing one more unit of it.
How does the PPC illustrate the concept of opportunity cost?
When the PPC is a straight line, opportunity costs are the same no matter how far you move along the curve. When the PPC is concave (bowed out), opportunity costs increase as you move along the curve. When the PPC is convex (bowed in), opportunity costs are decreasing.
Which of the following is true about the production possibilities curve quizlet?
Which of the following is true of a production possibilities curve? It reveals the maximum amount of any two goods that can be produced from a fixed quantity of resources.
Which of the following is true of the production possibilities curve?
The value of the highest valued alternative forgone as the result of the choice. Which of the following is true of a production possibilities curve? It reveals the maximum amount of any two goods that can be produced from a fixed quantity of resources.
What is the production possibilities curve PPC quizlet?
STUDY. Production Possibility Curve. A model that shows alternative ways that an economy can use its scarce resources. Demonstrates scarcity, trade offs, opportunity costs, and efficiency.
What is a production possibility curve quizlet?
What is the purpose of the production possibilities curve quizlet?
What is the purpose of production possibilities graph? To show alternative ways to use an economy’s resources.
What important concept is illustrated with the production possibilities frontier PPF )?
The Production Possibilities Frontier (PPF) is a graph that shows all the different combinations of output of two goods that can be produced using available resources and technology. The PPF captures the concepts of scarcity, choice, and tradeoffs.
How does the PPF illustrate the concept of scarcity?
The addition of the PPF curve thus illustrates scarcity by dividing production space into attainable and unattainable levels of production.