![]() What type of opportunity cost does the economy experience? ESSAY QUESTIONS …Īlong the production possibilities curve entails-on both the constant-cost curve and a bowed curve indicating increasing costs. Illustrate the following in the same diagram Scarcity, Choice and Opportunity cost c. Draw the Production Possibilities Curve b. Microeconomic Essei sample question Exhibit 1 Production possibilities curve data Consumption Goods Capital Goods 10 0 9 1 7 2 4 3 0 4 a. Economists use language that appears rather ordinary, but the meanings they attach Perhaps the best study hint for mastering this chapter (and one that applies to all subsequent chapters) is to learn the jargon used by economists. PRODUCTION POSSIBILITIES AND OPPORTUNITY COSTS Chapter in a Nutshell If your answers to these questions were e, c, e, b, and c, then you are on the right track. Econ Quiz #1 Choose one of the thousands addictive production possibilities curve quizzes, play and share. Choose one of the thousands addictive production possibilities curve quizzes, play and share. Play production possibilities curve quizzes on ProProfs, the most popular quiz resource. One of these is the concept of efficiency and economic growth. The production possibilities curve (PPC) is simply a device for illustrating a couple of fundamental points about economics. Carefully consider the differences between the three types of points. The PPF curve divides production space into 3 distinct areas, points on the PPF curve (points like B), points outside the curve (points like C), and points on the inside of the curve (points like A). (E) enacting a set of laws that protects resources from overuse. (D)allocating scarce productive resources to satisfy wants. (C) developing a price mechanism that reflects the relative scarcities of products and resources. The crucial problem of economics is (A) establishing a fair tax system. the first two questions) interrelate with …Ĭircle the letter of each correct answer. PRODUCTION POSSIBILITY CURVE (PPC) shows different combinations of production of two goods which an economy can produce within given …Ī distributive question in that it is based on the distribution of wealth in a society, the types of goods produced and method of production (i.e.If there is an increasing opportunity cost of Invariably, in order for an economy to increase the quantity of one good produced, production of the other good must be sacrificed. Best Answer: If you add up the production levels of each of the 4 workers and graph them, you will probably get a bowed out graph. ![]() Explain why it isĮconomics what is the production possibilities curve MICRO -ECONOMICS CHAPTER -1 INTRODUCTION TO ECONOMICS C.B.S.E. Reinforce the circular flow diagram by having the students complete Activity 5. To make the diagram more concrete, trace a single product through the circular flow. Use Visual 1.3 to introduce the circular flow diagram. Questions have specific answers, while others have no “right” answer. Consider points on the PPC and inside the PPC to illustrate the concept of opportunity cost. Questions about production Possibility Curve (PPC): 1. C) The Production Possibility Curves is a hypothetical representation of the amount of the two different goods that can be obtained by shifting resources from the production of one, to the production of other. Identify comparative and absolute advantage from a production Identify feasible and infeasible and efficient and inefficient points from a production possibilities frontier. Compute opportunity costs from a production possibilities frontier. Draw a bowed production possibilities frontier. The following questions practice these skills: Draw a linear production possibilities frontier. Suppose that the alternative uses of an hour of your time in the evening, ranked from best to worst, are (i) study economics, (ii) watch two half-hour TV sitcoms, (iii) play pool, and (iv) jog around town. It is a model of a macro economy used to analyze the production decisions in the economy and the problem of scarcity. Production Possibilities Curve – a graph that shows alternative ways to use an economy’s resources – does not show consumer satisfaction. Production Possibilities Curve The concept of opportunity cost and associated tradeoffs may be illustrated with a picture. Here is an example: Here is an example: Bob made a trade-off when he chose a job located close to his home over a job he loved. Question stem, the other one could be lurking in the correct answer choice. The Production Possibility Curve or the the Production Possibility Frontier is a graph which depicts all maximum output possibilities for two goods, given a … In the previous question, Dystopia’s production possibility curve is a straight line because in this instance (a) there are only two goods in the model. Production possibility curve examples questions answers pdf
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