ECON 1B03 Chapter 2: Chapter 2 - Production Possibilities and Gains from Trade

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amethystdonkey510

7 Nov 2016

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ECON 1B03 Full Course Notes

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Chapter 2 - production possibilities and gains from. Resource endowment - the fact that there are only so many resources available to produce goods and services and that"s that: a list of all available resources an economy has at any given time. Increased opportunity costs explain why the ppf is bowed out. The | slope | of a ppf is the opportunity cost of the good on the horizontal axis (x- axis). It is possible that resource can be perfectly shiftable and can be equally productive so that you always give up the same amount of one good to get more of the other: results in a linear ppf. Shifts in the ppf: anything that changes the available resources or changes the current technology will shift the ppf. Monday, september 12, 2016: a rightward shift of the curve indicates economic growth. Could be caused by immigration that increases the labour force.

Related Questions

A production-possibilities curve indicates the:

A) Combinations of goods and services an economy is actually producing.

B) Maximum combinations of goods and services an economy can produce given its available resources and technology

C) Maximum combinations of goods and services an economy can produce given unlimited resources

D) Average combinations of goods and services an economy can produce given its available resources and technology.

champagneoyster262

Any point on a country's production possibilities frontier represents a combination of two goods that an economy :

a. will never be able to produce.
b. can produce using all available resources and technology.
c. may be able to produce in the future with more resources and/or superior technology.
d. can produce using some portion, but not all, of its resources and technology.

olivegnu327

1. Where can an economy not produce?

a. Inside its production possibilities frontier

b. On its production possibilities frontier.

c. Outside its production possibilities frontier.

d. At the endpoints of its production possibilities frontier.

2. When an economy is operating at a point on its production possibilities frontier, then

a. Consumers are content with the mix of goods and services that are being produced.

b. There is no way to produce more of one good without producing less of the other.

c. Equal amounts of the two goods are being produced.

d. All of the above are correct.