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How does the production possibilities frontier illustrate opportunity cost and scarcity? Why might opportunity costs increase rather than stay the same as an economy produces
- How does the production possibilities frontier illustrate opportunity cost and scarcity?
- Why might opportunity costs increase rather than stay the same as an economy produces more and more of the same product?
- How do the numbers in the table below which represent a Production Possibilities Frontier exhibit Increasing Opportunity Costs? Calculate the opportunity cost of producing one more automobile in terms of lost corn between points A and B, points B and C, points C and D, and points D and E. Do you think this Production Possibilities Frontier would show a curved, bowed out shape if you graphed it?
Production of: | A | B | C | D | E |
---|---|---|---|---|---|
Tons of Corn | 70 | 60 | 45 | 25 | 0 |
Automobiles | 0 | 1 | 2 | 3 | 4 |
- How can excess unemployment and waste of resources be illustrated in the production possibilities frontier model?
- If an economy experiences growth, whether through an increase in resources or an improvement in technology, how can this be modeled in the production possibilities framework?
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