What does it mean if the production possibilities curve is concave?
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.
What causes a concave curve on a PPF graph?
Most of the PPF curves are concave due to the inadaptability of the resources. The law of increasing opportunity cost states: as the production of one good rises, the opportunity cost of producing that good increases.
Why does production possibility curve slope concave downward?
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. Such an allocation implies that the law of increasing opportunity cost will hold.
Which of the following is true if the production possibilities curve is a curved line concave to the origin?
Which of the following is true if the production possibilities curve is a curved line concave to the origin? Resources are perfectly substitutable between the production of the two goods.
Is the production possibility frontier always concave to the origin?
PPF is Concave Shaped: Due to increasing marginal opportunity cost, PPF becomes more and more steep as we move from points A to G. Technically, a curve with an outward bend is described as ‘Concave to the Origin’.
Why production possibility curve is convex?
The production possibility curve is convex outward from the origin because some of the economy’s resources are better able to produce good X than good Y while other resources in the economy are better able to produce good Y than good X.
What do combinations of output that fall inside the production?
Combinations of output that fall inside the production possibilities curve of an economy represent: – goods that are attainable. – the inefficient use of resources. You just studied 28 terms! 1/28.
Which of the following statements about the production possibility frontier is correct?
The correct answer is c) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier.
What would it mean to an economy if a PPF were curved instead of straight quizlet?
What would it mean to an economy if a PPF were curved instead of straight? The tradeoffs in that economy would not be the same at every point on the curve. What does every point outside a PPF represent. an unattainable production possibility. When a country’s economy grows, what happens to a PPF?
Why is the production possibility frontier concave Be sure to explain economic intuition behind that fact?
Why is the production possibility frontier downward sloping? Be sure to explain economic intuition behind that fact. The negative slope of the PPF illustrates the fact that larger quantities of cars correspond to a smaller amount of milk, and vice versa.