(a) The graph above shows the production possibilities curve for Fischerland. All rights reserved. PPC is concave to origin if the MRT is increasing. (2) The same resources can be used to produce either or both of the two … Production Possibility Frontier (PPF) refers to graphical representation of possible combinations of two goods that can be produced with given resources and technology. The production possibilities curve is also called the PPF or the production possibilities frontier. The production possibility curve (PPC) shows the different points where the producer is efficiently producing various combinations of two goods with the given amount of factors of production available. Ask Question + 100. 8 years ago. Why are workers 'incapable' of managing a plant by themselves? Favorite Answer ... 0 0. Is the US Dollar in Jeopardy as a result of Covid relief ? C. some resources are unemployed. A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or Transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be … 17. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. Ask Question + 100. The production of which of the following exhibits increasing opportunity costs: consumer goods only, capital goods only, both goods, or neither good? C. time is fixed. B. technology is fixed. Assume that the economy is currently at point B. scarcity requires economic choices. D. there is no inflation in the economy. Answer Save. In this example, let's say the economy can produce: 200 guns if it produces only guns, as represented by the point (0,200) 100 pounds of butter and 190 guns, as represented by the point (100,190) Furthermore, your actual product may be represented as a point on that graph in order to allow you to know where your business stands right now in regards to efficiency. Relevance. Question: The construction of a production possibilities curve assumes: A. the quantities of all resources are unlimited . A. the quantities of all resources are unlimited. In business analysis, the production possibility frontier (PPF) is a curve illustrating the varying amounts of two products that can be produced when both depend on the same finite … What are the pros and cons of a global currency? Production Possibility Curve: Use # 6. Still have questions? D. there is no inflation in the economy. There is no assumption of fixed resources or labor and technology which makes the other statements wrong. On the other hand, the Production Possibility Curve (PPC), also known as the Production Possibility Frontier or Boundary or the Transformation Curve shows the maximum combinations of two goods that a country can produce, with its given resources and at a given level of technology. The four key assumptions underlying production possibilities analysis are: (1) resources are used to produce one or both of only two goods, (2) the quantities of the resources do not change, (3) technology and production techniques do not change, and (4) resources are used in a technically efficient way. Tags: Question 3 . Economizing Resources: ADVERTISEMENTS: The production possibility curve tells us about the basic fact of human life that the resources available to mankind in terms of factors, goods, money or time are scarce in relation to wants, and the solution lies in economizing these resources. Such an allocation implies that the law of increasing opportunity cost will hold. the shape of the production possibilities curve illustrates the law of increasing cost. D. there is no inflation in the economy. - Definition, Theory & Formula, Human Resource Management: Help and Review, College Macroeconomics: Homework Help Resource, Introduction to Macroeconomics: Help and Review, UExcel Business Ethics: Study Guide & Test Prep, College Macroeconomics: Tutoring Solution, Hospitality 101: Introduction to Hospitality, FTCE Business Education 6-12 (051): Test Practice & Study Guide, Introduction to Management: Help and Review, UExcel Organizational Behavior: Study Guide & Test Prep, DSST Human Resource Management: Study Guide & Test Prep, Introduction to Human Resource Management: Certificate Program, Biological and Biomedical B. some resources are unemployed. All choices along the curve shows production efficiency of both goods. Anonymous. production of more defense goods means fewer consumer goods. The downward slope of the production possibilities curve is an implication of scarcity. The production possibilities frontier is constructed by plotting all of the possible combinations of output that an economy can produce. Use The Table Below To Answer The Questions. What... A manufacturer determines that x employees on a... An economy produces hotdogs and hamburgers. Assume that the country of Fischerland produces only consumer goods and capital goods. PPC can have three different shapes and the shape of PPC depends on the marginal rate of transformation (MRT). B. some resources are unemployed. A is correct. 16. Each year, you grow several different crops. Assuming the economy is initially operating on the curve, indicate how the production of public goods might be increased. 30 seconds . 1 Answer. What happens if everything I spend my stimulus check on is made in China? 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