1 / 12

Production possibilities curve

Production possibilities curve. An introduction. Abstractions and Assumptions of a PPC. Compare 2 variables; goods or services Trade-offs or opportunity cost involved All available resources are fully employed All available technology is fully employed

tasha-harvey
Télécharger la présentation

Production possibilities curve

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Production possibilities curve An introduction

  2. Abstractions and Assumptions of a PPC • Compare 2 variables; goods or services • Trade-offs or opportunity cost involved • All available resources are fully employed • All available technology is fully employed • Productive efficiency: Resources are employed in the least costly way

  3. Increasing opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  4. Increasing opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  5. Zero opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  6. Zero opportunity cost per unit of good B What type of curve illustrates the label below? improbable Good B Good A

  7. Constant opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  8. Constant opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  9. Decreasing opportunity cost per unit of good B What type of curve illustrates the label below? Good B Good A

  10. Decreasing opportunity cost per unit of good B What type of curve illustrates the label below? Impossible; not supported by economic theory Good B Good A

  11. What trade-offs are involved? Why is the PPC concave? What does point (E), inside the PPC illustrate? What is the significance of point (F), outside the PPC? Under what conditions can point F be reached? A 12 F B 10 8 army trucks 6 C E 4 2 D 0 1 2 3 cars

  12. H F G A Moving from point B to point A, could eventually expand the frontier from G,G to H,H B capital goods C E D 0 H G consumer goods

More Related