Production Possibility Frontier ( Ppf ) Essay - 952 Words

1. Production Possibility Frontier (PPF) is a graph that shows the potential combinations of goods that an economy is able to produce given available technology and factors of production. ïÆ'Ëœ Its slope is negative, shape is concave or bowed, points inside are inefficient, a point on the PPF are efficient and attainable, point above are unattainable and also require economic growth. ïÆ'Ëœ Economic growth is achieved by increasing the economics’ growth, ability to produce. 2. Opportunity cost is the value of next best option. Giving up one thing to do something else. ïÆ'Ëœ Parts of opportunity cost are explicit costly (money spent along the project to make it happen, for the task to be done perfectly money and labor need to be involved, e.g. Boss paid workers for their project, students pay tuition to enroll in class and all other amenities involved.) and implicit cost (one’s time value or origin in the next best alternative. The time incorporated in order to run out the next best option). 3. Macroeconomics deals with large scale phenomena. Microeconomics deals with the options of small economic unit. ïÆ'Ëœ Microeconomics involves supply and demand in an individual market, individual consumer behavior, and externalities arising from production and consumption; while, macroeconomics involves monetary/fiscal policy, reason for inflation and unemployment, and international trade/ globalization. ïÆ'Ëœ Microeconomics discusses topics like individual labor market, consumer behavior, and theoryShow MoreRelatedMicroeconomy Homework1744 Words   |  7 Pagesboth countries D) good Y is the same for both countries Production Possibilities Frontier Questions 16 to 18 refer to the figure below 16) Point C on the production possibilities frontier in the above figure illustrates A) a point that achieves production efficiency B) a combination of goods and services that cannot be produced efficiently C) a point that achieves greater production efficiency than point A and B D) a production point that underutilizes resources 17) In the above figureRead MoreIb Work822 Words   |  4 Pagesof Beckham uses economic resources to produce tea and crumpets. Use the following production possibilities frontier for questions 3–4. 3. Economic growth is best represented by a movement from k. A to B l. B to C m. C to D n. D to E o. E to A 4. The shape of this PPF tells us that p. economic resources are perfectly substitutable from production of tea to production of crumpets. q. citizens prefer that an equal amount of tea and crumpets beRead MoreAssignment Questions On Economic Principles1049 Words   |  5 Pageseconomists to make decision of the alternative use of scarce resources. By using production possibility frontiers (PPF) can be illustrated the opportunity cost to result a clear simple way to effects of making economic choice. A PPF is show the consumers goods and consumers services at the same time. B) Suppose that the two goods that the country AMP produces Apples and Mobile phones. If the production possibility frontiers (PPF) were a straight line, the additional of the unit of mobile phones requiredRead MoreEconomics687 Words   |  3 Pages a. Use a production possibilities frontier graph to illustrate the trade-off to an economy between producing consumption goods and producing capital goods. Is it likely that the production possibilities frontier in this situation would be a straight line or bowed out? Explain briefly. b. Suppose a technological change occurs that has a favourable effect on the production of capital goods but not on consumption goods. Show the effect on the production possibilities frontier. c. SupposeRead MoreEconomic Models Are False And So Government Should Ignore Their Predictions1469 Words   |  6 Pagesmonitored to understand and predict for the future benefit that is where the economic models are helpful. There are several economic models that helps in predicting economic activities among them is production possibility frontier model (PPF). Production possibility frontier model shows the maximum production capacity of the business by utilizing all the available resources like manpower, land, capital and other resources (Khan, n.d., para. 4).This will help to maximize the employment and utilizationRead MoreHow Freely Operating Market System1109 Words   |  5 Pageswhich is a production possibilities frontier (PPF). Production Possibility Frontier (PPF) A production possibilities frontier shows the combination of the production between two products (Spaulding, 1982). An economy can achieve the maximum potential level of output for two goods or services when all its resources are fully and efficiently employed by using a production possibilities frontier (Sumanasiri, 2014). Figure. 4 A production possibility frontier (PPF) As we canRead MoreMacro Eco1739 Words   |  7 Pagesshirts with inputs of labor. Econoland has 1000 hours of labor available. A haircut requires  ½ hour of labor, while a shirt requires 5 hours of labor. Construct Econolands PPF. Answer 1: To construct Econolands Production Possibility Frontier (PPF) we first need to understand what is a PPF. A production possibilities frontier (PPF) is a graph showing the different quantities of two goods that an economy can efficiently produce with limited productive resources. Points along the curve describeRead MoreQuestions On Business Economics And The Production Possibilities Frontier As A Result Of Workers Moving From Their Domestic Countries1837 Words   |  8 PagesK140882 EXECUTIVE SUMMARY The report deals with issues that arise in the production possibilities frontier as a result of workers moving from their domestic countries to foreign countries for better work opportunities. Major focus of this report is on change in PPF curve due to emigration and how production is being affected due to it. The main issues discussed in the report are how change in technology or resources mediate PPF curve outward or inside and how environment is being affected by that.Read MoreEfficiency Gain of International Trade Essay1745 Words   |  7 Pagesshapes of the production possibility frontier, and briefly discuss the factors contributing to their shapes. The shape of the production possibility frontier (PPF) of a country depends on: (1) its factor endowments and (2) the production functions of the various commodities. The plausible shapes of the production possibility frontier include: Linear Suppose there are constant returns to scale in both industries and only one factor, then the production possibility frontier is a straightRead MoreHow Will The Frontier Be Affected By A Positive Change?1274 Words   |  6 PagesQuestion One a. Why is the PPF concave to the origin? The production possibilities frontier is concave to the origin as it represents the increase opportunity goods along with the outputs of goods which is increasing. This is due to the law of opportunity goods – with one increase or production, an increase in opportunity costs follows (Layton, Robinson and Tucker, 2016). b. How will the frontier be affected by a positive change in technology for the product on the horizontal axis? The points represented