Chapter 2: Q12 (page 44)
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
Short Answer
Production Possibility Curve is concave to origin, due to increasing Marginal opportunity cost.
Chapter 2: Q12 (page 44)
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
Production Possibility Curve is concave to origin, due to increasing Marginal opportunity cost.
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Get started for freeExplain why individuals make choices that are directly on the budget constraint, rather than inside the budget constraint or outside it.
Could a nation be producing in a way that is allocatively efficient, but productively inefficient?
Marie has a weekly budget of \(24, which she likes to spend on magazines and pies. If price of magazine is \)4 each & price of pie is 12 each.
What is Marie’s opportunity cost of purchasing a
pie?
During the Second World War, Germany’s
factories were decimated. It also suffered many human
casualties, both soldiers and civilians. How did the war
affect Germany’s production possibilities curve?
Individuals may not act in the rational, calculating way described by the economic model of decision making, measuring utility and costs at the margin, but can you make a case that they behave approximately that way?
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