Read this article to learn about the assumptions, characteristics, opportunity cost, change in production possibility frontier and overview of production possibility frontier!. The production possibility frontier assumes that production is operating at a maximum amount of productive efficiency. Moving along the PPF curve represents a change in the use of resources from one product to another. C) the level of technology is fixed and unchanging. A) Labour, capital, land and natural resources are unlimited in quantity. Free. AACSB: Reflective Thinking. In the 2-factor, 2 good Heckscher-Ohlin model, the country with a relative abundance of _____ will have a production possibility frontier that is biased toward production of … Multiple Choice . It also assumes that the production of any one commodity will only increase if the production of another commodity decreases because of finite resources. b. Due to scarcity of resources, we cannot satisfy all our wants. c. 4,000 d.0 can openers and 7 drill presses. 12) In a production possibilities frontier model, a point inside the frontier is A) allocatively inefficient. the production possibility frontier is strictly convex, except over any interval in which m I = 712, in which case the frontier is linear' (Manning and McMillan, 2 For elaboration of this point see, in particular, Markusen and Melvin (1981, 1984). Browse All Courses Lesson summary: the production possibilities frontier. Correct Answer: C. Any level of the two products that the economy produces is currently possible. B) any level of the two products that the economy produces is currently possible. 6) The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. d. production of goods requireds full employment of all resources. 7) The production possibilities frontier assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity ) the economy produces only two products. The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. B. an improvement in technology. The production-possibility frontier of a country can be said to shift outward as a result of the following.Which, if any, is the wrong explanation? The PPF demonstrates the maximum that can be produced with a given set of resources. Figure 2 The production possibilities curve assumes all of the following EXCEPT A) opportunity costs are constant. B)the economy produces only two products. Answer to: A non-linearExplore over 4,100 video courses. Question: Which of the following are true for the points along the production possibilities frontier (PPF)? Q 7 Q 7. B) the economy produces only two products. A side note on economic models. a. the economy produces only two products. C) any level of the two products that the economy produces is currently possible. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. a. This is known as the marginal rate of transformation which describes the cost of forgoing the alternative in the form of quantity of output. They can be summed up with the term ceteris paribus (all … In this example, the two commodities that that country produces are food (F) and clothes (C). D) the level of … In all PPFs, a series of rules must be followed. The law of increasing opportunity costs assumes that all people have the same ability to produce goods. d. the level of technology is fixed and unchanging. D) … PPF is a graph or a curve indicating different production possibilities of two commodities with fixed resources or the inputs. The production possibilities frontier model assumes all of the following except A)labor,capital,land and natural resources are fixed in quantity. What is PPF? B) the economy produces only two products. 1.The production possibilities frontier can be used to demonstrate which of the following? 6) The production possibilities frontier model assumes which of the following? (2) The same resources can be used to produce either or both of the two goods and can be shifted freely between them. A)Expenditures on new plants and equipment are constantly being made. The production possibility curve is based on the following Assumptions: (1) Only two goods X (consumer goods) and Y (capital goods) are produced in different proportions in the economy. D) the quantities of the technology and production techniques do not work c. PPF after the war is probably the same PPF as before the war. c. any level of the two products that the economy produces is currently possible. Even if an economy uses all its resources in the best possible manner, its capabilities are restricted due to scarcity of resources. B) scarcity requires economic choices. Objective: LO1: Use a production possibilities frontier to analyze opportunity costs and trade-offs. A) labor, capital, land and natural resources are fixed in quantity. C) allocatively efficient. B) the economy produces only two products. B) productively inefficient. b. the economy produces only two products. D)the level of technology is fixed and unchanging. 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