the more resources the economy uses to produce one … A straight line PPF indicates that the opportunity cost of producing additional units of output is fixed, while a bowed-outward PPF indicates that the opportunity cost rises with production. The law of increasing opportunity costs says that as more of a good is produced, the opportunity costs of producing that good increase. Drag the correct word or phrase to the corresponding blank in each sentence. C)opportunity costs are constant. 2. Producing one good always creates a trade off over producing another good. 3. Even if an economy uses all its resources in the best possible manner, its capabilities are restricted due to scarcity of resources. This straight frontier line indicates … Point A corresponds to 10 units of X and 20 units of Y point B corresponds to 5 units of X and 30 units of Y. A straight-line production possibilities frontler (PPF) ilustrates opportunity costs. Since the production possibilities frontier represents all of the points where all resources are being used efficiently, it must be the case that this economy has to produce fewer guns if it wants to produce more butter, and vice versa. B)resources are imperfect substitutes. a worker would be equally effective whether (s)he was in computing, mining or bus driving. The production possibility frontier indicates the maximum production possibilities of two goods or services, assuming a fixed level of technology and only one choice between the two. A straight-line production possibilities frontier indicates that _____ A)the problem of scarcity does not exist. The slope of the production possibilities frontier represents the magnitude of this tradeoff. If every trade-off were the same, it would create a straight line. Sometimes, the production possibility frontier does not look like a curve—instead, it’s linear, meaning that it’s simply a straight line. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced. Point A and B are on a production possibilities frontier. This point shows widget production increased by 2, and this by 2 more, and this by 2 more, indicating all widgets and no gadgets. The production possibilities frontier (PPF) is curved because the cost of production is not constant. D)technology is rapidly expanding. Question 6 (1 point) A production possibilities frontier is a straight line (constant slope) when an economy is interdependent and engaged in trade instead of self-sufficient. the opportunity cost of production is always the same. resources are equally adaptable to the production of either product (A straight-line production possibilities frontier indicates a constant opportunity cost due to the perfect adaptability of resources) 19 The figure given below shows the production possibilities frontier for Good A and Good B. Production Possibilities Frontier Graph. E)some resources are not being used efficiently. A … If a production possibility frontier was a straight line, it would imply that any factor of production was equally good at operating in any industry – i.e. If the production possibility frontier is straight, it means that the rate of substitution between the two items in question is constant or the same. Due to scarcity of resources, we cannot satisfy all our wants. The production possibility frontier demonstrates that there are, or should be, limits on production. This would mean that factors of production … Read this article to learn about the assumptions, characteristics, opportunity cost, change in production possibility frontier and overview of production possibility frontier!. As time passes, the production possibilities frontier shifts outward due to the accumulation of … The production of a good has an opportunity cost. o 1. So along the straight line, each time Econ Isle increases widget production by 2, it loses the opportunity to produce 4 gadgets. The production possibilities frontier is downward sloping: producing more of one good requires producing less of others. An economy, to achieve efficiency, must decide what … But the direction that PPF is curved comes from the way that the trade-offs change. Does not exist was in computing, mining or bus driving much each... 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