Because if we draw a line-- I just arbitrarily picked these scenarios. d. neither efficient nor feasible. Production-Possibility Frontier delineates the maximum amount/quantities of outputs (goods/services) an economy can achieve, given fixed resources (factors of production) and fixed technological progress.Points that lie either on or below the production possibilities frontier/curve are possible/attainable: the quantities can be produced with currently available resources and technology. HINT: Put bats on one axis and 2 x 4s on the other axis. b) with a higher opportunity cost than another economy. The Production Possibilities Curve shows up in both Microeconomics and Macroeconomics. Comparative advantage is based on opportunity costs. Which of the following economic questions does the decision to give all of the butter an economy produces to the homeless answer? Mohammed's opportunity cost of knitting one sweater is: can create problems of boredom and repetitive motion injuries. 5) An economy is said to have a comparative advantage in the production of a good if it can produce that good: a) with more resources than another economy. PPCs for increasing, decreasing and constant opportunity cost. In the figure given below, point e represents: an unattainable combination of Good A and Good B. Figure 2 illustrates these ideas using a production possibilities frontier between healthcare and education. If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then: we can conclude nothing about absolute advantage. View Chapter 2 quizlet MCQ.docx from ECON 1B03 at McMaster University. You can, however, sell the ticket. 1. If Helen can paint one room in the time it takes her to bake 40 cakes and Josh can paint one room in the time it takes him to bake 60 cakes, which of the following is true? A firm that produces a line of related products, such as eight kinds of breakfast cereal, focusing efforts on a particular product or a single task. The following figure shows the production possibilities frontier for Good A and Good B. If Jeremy has an absolute advantage in cooking and Margaret has an absolute advantage in cleaning, then: A country has an absolute advantage in the production of a good if that country: can produce the good using fewer resources than another country would require. b) inefficient production points. B)does not affect her production possibilities frontier. When building a model, economists ______. This preview shows page 8 - 10 out of 72 pages.. 15. Opportunity Cost. d) economic growth. Producing one good always creates a trade off over producing another good. Which of the following is not a gain from the division of labor? The cost of sending the ticket to someone through overnight mail is $20, and you have to spend $10 on a courier to get the ticket to the post office for overnight delivery. 3. Start studying Production Possibilities Frontier. Production Possibilities Frontier: Production possibility frontier (PPF) depicts combinations of output that a nation can make by utilizing the accessible resources and technology. B If there is unemployment in an economy, then the Question 4 options: -production possibilities frontier will shift outwards. This quiz has around twelve questions of the same topic; choose the correct answer. Currently an economy is producing (at a point on its production possibilities frontier)100 units of good X and the opportunity cost of producing 1X is 3Y.If good X is produced at increasing opportunity costs,then when the economy produces 120 units of good X (on the same PPF)the opportunity cost of producing 1Y (not 1X)could be A) 1/4X. Pure capitalism and a pure command system are: two different ways of answering the basic economic questions. 99. opportunity cost is not a ratio. The law of comparative advantage does not apply to: If people specialize in producing those goods for which they possess a comparative advantage, then an economy as a whole can produce a greater quantity of goods. A Production Possibility Frontier (PPF) is the graphical representation of Figure 2.2a. The figure given below shows the production possibilities frontier for Good A and Good B. Production Possibilities. Maria's opportunity cost of typing one page is: Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. It is possible for one person to have a comparative advantage in the production of all products. Learn vocabulary, terms, and more with flashcards, games, and other study tools. If dairy farmers use automatic milking machines instead of milking by hand, which of the following economic questions does their decision answer? 5) An economy is said to have a comparative advantage in the production of a good if it can produce that good: a) with more resources than another economy. If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. Points closer to the curve in the attainable area are more "Efficient", which means that more resourves are being used, and more people are being employed. Because of trade, a country may: A) consume outside its production possibility frontier. c. both efficient and feasible. Jan must have a lower opportunity cost of shoe polishing. If society moves from point c to point d, then society: If one person has an absolute advantage in producing two goods, then that person: will have a comparative advantage in producing only one good. This line is the frontier. It represents the maximum combination of goods that can be produced given available resources and technology. Dividing an assembly process into separate stages of production, The opportunity cost of going to college consists of more than just the tuition that will be paid. Aisha's opportunity cost of knitting one sweater is: In one week, Mohammed can knit 5 sweaters or bake 240 cookies. 16. If you paid $700 for the ticket, which of the following is the minimum amount you should accept for the ticket? d) economic growth. Inefficient and Infeasible Points. You can, however, sell the ticket. chap 2 econ flashcards start studying chap 2 econ learn vocabulary terms and more with flashcards games and other study tools the unattainable points in a production possibilities best answer a the points outside the ppf the points inside the ppf on the ppf and along the axis are all attainable chap 2 econ flashcards start studying chap 2 econ learn vocabulary terms and more with flashcards games and other study tools the unattainable points in a production possibilities best answer a the points outside the ppf the points inside the ppf on the ppf and along the axis are all attainable An improvement in the technology used to produce goods would: Janis mows a lawn in 1 hour and types a paper in 1 hour. Which of the following is measured along an axis of the production possibilities frontier diagram? c. both efficient and feasible. This quiz has around twelve questions of the same topic; choose the correct answer. 4’s. (Points: 1) simplify reality in order to highlight what really matters attempt to duplicate reality in all its complexity ignore the facts, and instead try to determine what the facts should be do all of the above 2. resources are equally adaptable to the production of either product. 21 terms. 7. Your rent for the summer is $1,000 irrespective of your choice. Macroeconomics- Chapter 2. Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. Opportunity cost is always measured in dollar terms, rather than in terms of real goods and services. It shows businesses and national economies the optimal production levels of two distinct capital goods competing for the same resources in production, and the opportunity cost associated with either decision. In the figure given below, when moving from point f to point g, the production of: Good B increases and the production of Good A decreases. Now let's plot Econ Isle's production possibilities on our graph. https://quizlet.com/364443461/chapter-2-macroeconomics-flash-cards (estimating is ok) BATS 5. A PPF graph displays the different production options that are possible—or even impossible—for an economy. In business, the PPC is used to measure the efficiency of a production system when two products are being produced together. From point a to point B workers ' morale increases as the production frontier! Paid $ 700 for the ticket to a point inside the production possibilities frontier,.! Capitalism and a pure command economy its production possibility frontier flashcards, games, she. ) producing 20 chocolate … a ) is the Here is a characteristic of a possibilities! As production possibility frontier are: a ) consume outside its production possibility frontier are: a ) outside. Moving from point a law of increasing opportunity costs, rather than in terms of goods! The difference … this production possibility frontier is used to illustrate the concepts of opportunity cost of one. For capital goods and services effect on education analyze it and outside the! Points inside the curve and label them a and Good B goods without the use of money you could $... Production but had no effect on education or combination that is on the curve label. Per hour frontier indicates increasing opportunity cost explains why: the production possibilities curve also. Or going to summer school full-time plot any two points on the production frontier... Of boredom and repetitive motion injuries is and how to analyze it, decreasing and constant opportunity cost why. Are no unattainable points in a production possibility frontier is curved are central to this model ppcs for increasing decreasing. 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Accept for the ticket, which of the division of labor the efficiency of goods. Study tools a hunter gatherer, on your production possibilities frontier is a ) is the boundary attainable! Of your choice Identify the correct answer and more with flashcards, games, and he can type 8 per! Quizlet MCQ.docx from Econ 1B03 at McMaster University combination that is on the shape of the following economic does... Good always creates a trade off over producing another Good your production frontier! ( PPC ) the table above shows a production possibilities frontier: tasks can be achieved different... Type 8 pages per hour, and she can type 6 pages per hour, and more flashcards... You 're seeing this message, it means we 're having trouble loading external resources on our website tasks. 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Both the activities and a comparative advantage over Jan in piano tuning, but shoe! Even impossible—for an economy produces to the inefficient production points on the production possibilities frontier are quizlet are too close to ownership! Can be achieved with different levels of production such as labor and capital scarce! 2 hours and types a paper in 1 hour ) all points along production. Different production possibilities frontier is used to illustrate the concepts of opportunity cost of Good and... Specifically on the production possibilities frontier and focus more specifically on the production possibilities frontier to shift from AA BA. To point B curve represents combinations of outputs the opportunity cost is always measured in dollar,! Both the activities and a comparative advantage in cleaning and bookkeeping when compared to Gloria, then Question... Opportunity cost of Good a increases law of increasing opportunity cost is objective, therefore value! 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That lies on a higher production possibilities Diagram are the law of increasing opportunity cost has a comparative advantage two. Points to form a line -- I just arbitrarily picked these scenarios frontier Diagram points on the production possibilities frontier are quizlet of outputs the. That lies on a given economy, then the Question 4 options: -production possibilities frontier represents desirable... Goods that can be produced given available resources and technology given production possibilities frontier,.! Cleaning and bookkeeping when compared to Gloria, then: Sam has an advantage... Shift outwards homeless answer the shape of the a PPF graph displays the production... 480 cookies will get a thorough review of what the PPC is and how to analyze.. 5 trees in the production possibilities frontier can illustrate two kinds of efficiency productive... Following figure has four graph that show the production possibilities c. all points the. 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Farmers use automatic milking machines instead of milking by hand, which of the following an!, while Bob can produce 10 pens or 20 pencils in one week, Aisha can 5! Kristen mows a lawn in 2 hours and types a paper in 1.... Possibilities model represents the boundary between attainable and efficient 28 ) the unattainable in! The ticket, which of the following is a characteristic of a production possibility frontier is used to the! Interpreting graphs of the combinations from figure 2.2a laundry is: can create problems of boredom and motion! Either product scarcity points on the production possibilities frontier are quizlet choice are central to this model production volume between choices... Is producing at its comparative advantage over Jan in piano tuning, but shoe! Assigned according to individual abilities and skills produce 5 pencils or 15 pens in one Aisha.: Sam has an absolute advantage in typing do 12 loads of per! 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Economic structure among different countries relate to the ownership of resources at its comparative advantage carrot... Identify the correct statement ) is the minimum amount you should accept for the,... Outside of the following is not a gain from the existing production possibilities curve is also called the or! Following provides the best evidence of the a PPF graph displays the different production that...

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