A production possibilities curve is drawn based on which of the following assumptions? a....
Question:
A production possibilities curve is drawn based on which of the following assumptions?
a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall.
b. Resources such as nonrenewable resources will decline, but labor remains fully employed and technology is unchanged.
c. Resources can vary; most resources experience times of unemployment; and technology advances, particularly during wartime.
d. Resources such as labor and capital will grow and are fully employed, and technology is unchanged.
e. None of the answers correct.
Prodcution Possibility Curve
Prodcution Possibility Curve is a tool used to solve the economic problem of what to produce by showing all such points where the resource of the economy are used in the best possible manner.In other words, Prodcution Possibility Curve is just an abstraction used to demonstrate the the concept of opporutinty cost. It is also known as transformation curve
Answer and Explanation: 1
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View this answerThe correct option is e. None of the answers correct.
None of the answers state the correct assumption that resources are fixed and fully employed,...
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Using the Production Possibility Curve to Illustrate Economic Conditions
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Chapter 3 / Lesson 8
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The production possibility curve demonstrates the potential profit from a given economic condition. See how this illustrates different economic conditions through evaluating scarcity, production factors, efficiency, and opportunity costs.
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- A production possibilities curve is drawn based on which of the following assumptions? a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall. b. Resources such as non-renewable resources will dec
- Which of the following is NOT an assumption that economists make when developing a production possibilities frontier (PPF)? a. We live in a world with only two goods. b. There are no increases in technology. c. There is no change in available resources. d
- Which of the following is assumed in constructing a typical production possibilities curve? (a) The economy is engaging in international trade (b) Production technology is fixed (c) The economy is using its resources inefficiently (d) Resources are perfec
- When constructing a typical production possibilities curve, economists assume a. economic resources are underutilized. b. resources are equally productive in many alternative uses. c. all available resources are fully employed. d. production technology is
- A nation's production possibilities curve is "bowed out" from the origin because a. resources are not perfectly adaptable to the production of alternative goods. b. capital goods and consumer goods utilize the same production technology. c. resources are
- Shifting the production possibilities curve An outward shift of an economy's production possibilities curve is caused by a. entrepreneurship. b. an increase in labor. c. an advance in technology. d. all of the above.
- On a given production possibilities frontier, which of the following is not assumed to be fixed? A. the amount of labor available B. the amount of capital available C. the level of technology D. the amount of land and natural resources available E. produc
- A shift in the production possibilities frontier curve will occur as a result of all of the following except: a. A change in the endowment of resources, b. A change in technology, c. A change in the production of one good relative to another good, d. A ch
- The economy is at a point below the production possibilities curve. What is the most likely explanation for this? a. All resources are not being utilized or a technical inefficiency exists in the production process b. A technical efficiency exists in a
- An outward shift of an economy's production possibilities curve is caused by which of the following? a. entrepreneurship b. an increase in labor c. an advance in technology d. all of the above
- Given a production possibilities curve for defense goods and non-defense goods, which of the following is not true? A production point outside the curve: a) may be attained if new resources are discovered. b) may be attained by acquiring new technology.
- The Production Possibilities Model/Frontier(PPF) illustrates the concepts of Scarcity, Choice(trade-off), and Opportunity Cost(value forgone); under the assumptions of: fixed (limited) resources, fixed technology, efficient production and full employment,
- Given below is a production possibilities combination of a hypothetical economy producing under conditions of efficiency, contact technology, and constant level of resources. The economy is faced with 6 possible production alternatives as follows.
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- On a given production possibilities frontier, which of the following is not assumed to be fixed? a) the amount of labor available. b) the amount of capital available. c) the level of technology. d) the amount of land and natural resources available.
- The assumption that does not shift the production possibility frontier is: A. The amount of labor available B. The amount of the capital resources C. The level of unemployment D. The rate of techn
- A production possibilities frontier will be bowed out if: a) There is scarcity, b) Technology is improving, c) Production of one good involves an opportunity cost, d) Resources are not perfectly adaptable to making each good, e) Resources are used efficie
- When drawing a production possibilities frontier, which of the following is held constant? a. the available factors of production and the state of technology b. the amount of money in the economy c. the prices of goods and services d. the quantity of the
- For an economy to produce at a point beyond its production possibilities curve, the economy can: A. use its current set of resources more efficiently B. charge lower prices C. charge higher prices D.
- Assume that all the resources (labor, capital, land, and technology) in an economy are optimally placed. With the scarce availability of resources, the production of an additional unit causes a rise in the production cost more than the average. It can be
- Key Concept: Economic growth An outward shift of an economy's production possibilities curve is caused by an a. Increase in capital. b. Increase in labor. c. Advance in technology. d. All of the answers are correct
- Which is not one of the assumptions underlying the Production Possibilities Curve: a. Resources are fully employed, b. Production takes place over a specific time period-for example, one year, c. Resources are fixed in both quantity and quality, d. Techno
- Which of the following, will not cause a shift in the production possibility curve? a. A rise in the price of one or both of the goods being produced, b. An improvement in the technology used to produce one of the goods, c. An improvement in the technol
- An outward shift of an economy's production possibilities curve is caused by: a. entrepreneurship b. an increase in labor c. an advance in technology d. all of the above
- Which of the following does not expand economic growth? A. Widen economic opportunities B. Scarcity C. New technology D. Production facilities
- The bowed shape of the production possibilities frontier can be explained by the fact that? A) all resources are scarce. B) economic growth is always occurring. C) the opportunity cost of one good in terms of the other depends on how much of each good t
- Combinations of goods outside the production possibilities curve (PPC) have which of the following characteristics? a. They are attainable today only if we employ all unemployed or underemployed resources. b. They are not attainable given our existing s
- Draw a production possibilities curve for a hypothetical economy producing capital goods and consumer goods. Suppose a major technological breakthrough occurs in the capital goods industry and the new technology is widely adopted only in this industry. Dr
- Which of the following determinants shifts the long-run aggregate supply curve to the right? A) Labor resource availability B) Changes in capital C) Production technology D) All of the above
- The LRAS curve is nearly vertical because: a. When the public gets very rich, they do not need more goods and they only bid the prices up for existing goods b. As we approach potential GDP, the economy can not expand output, given our resource base and le
- According to Keynes, equilibrium income and output are determined by A. available resources and technology in the short run. B. aggregate demand in the short run. C. the position of the long-run aggregate supply curve. D. the natural rate of unemployment.
- Which of the following does not expand economic growth? (a) New technology (b) Production facilities (c) Scarcity (d) Widen economic opportunities
- The bowed-out (concave) shape of a production possibilities frontier: a) is due to technological change. b) is due to capital accumulation. c) reflects the existence of decreasing opportunity cost. d) is due to the equal usefulness of resources in all act
- 1. Clean air is a scarce resource. a. True b. False 2. Economic growth can be pictured in a production possibilities curve diagram by a. shifting the production possibilities curve out. b. moving fro
- Which one of the following would likely shift a production possibilities frontier inward? a) a drought. b) a technological improvement. c) a decrease in the price of natural resources. d) all of the above. e) None of the above since production possibility
- Technological innovations will cause: a. the production possibilities curve to shift to the left. b. the production possibilities curve to shift to the right. c. the production possibilities curve to stay the same. d. an economy to operate below its produ
- The productivity of a resource in influenced by all but which one of the following? a. Technology. b. Resources prices. c. Managerial ability. d. Productivity of other resources.
- In the production possibilities model of an economy, when there is full employment of resources A. a nation will be operating at an interior point within its production possibilities curve. B. a nation will be operating on the production possibilities c
- According to McEachern (2012): The long-run aggregate supply curve depends on the supply of resources in the economy, the level of technology, and the production incentives provided by the formal and
- The long-run aggregate supply curve is influenced by: A. level of technology. B. resources available. C. efficiency levels. D. all of the above.
- The construction of a production possibilities curve assumes: A. the quantities of all resources are unlimited B. some resources are unemployed. C. time is fixed. D. there is no inflation in the econo
- Generally, opportunity costs increase and the production possibilities frontier bows outward. Why? a. Unemployment is inevitable. b. Resources are not equally useful in all activities. c. Technology is slow to change. d. Labor is scarcer than capital.
- If the economy is on the production possibilities frontier (PPF), the economy is a) productive inefficient. b) operating with unemployed resources. c) productive efficient. d) none of the above.
- The bowed-out (concave) shape of a production possibilities frontier, A) is due to capital accumulation. B) is due to technological change. C) reflects the existence of increasing opportunity cost. D) is due to the equal use of resources in all activities
- The amount of output that would be produced by an economy if resources were being utilized at a high rate that is sustainable in the long run is referred to as the: a. potential output b. Walrasian output c. partial-equilibrium output d. natural output
- The bowed shape of the production possibilities frontier can be explained by the fact that: a. all resources are scarce. b. economic growth is always occurring. c. the opportunity cost of one good in terms of the other depends on how much of each good the
- Economic growth can be pictured in a production possibilities curve diagram by: a. shifting the production possibilities curve out. b. moving from right to left along the curve. c. moving from left to right along the curve. d. shifting the production poss
- An increase in a country's technology would most likely: A. move the country further up its production possibilities curve. B. move the country to a point closer to its production possibilities curve C. shift its production possibilities curve to the righ
- If Sam is producing at a point inside his production possibilities curve, then he: A) can increase production of both goods with zero opportunity cost. B) is fully using all his resources and allocating his resources to their best use. C) must be doing
- An outward shift of an economy's production possibilities curve is caused by an: a. increase in capital. b. increase in labor. c. advance in technology. d. All of the answers are correct.
- The economy experiences economic growth if: A.the resource base decreases. B.the production possibilities frontier shifts inwards. C.the number of workers decreases. D.the production possibilities frontier shifts outwards.
- A point outside the production possibilities curve is: A. unattainable without economic growth. B. attainable and the economy is efficient. C. unattainable without inflation. D. attainable, but the economy is inefficient.
- The production possibilities frontier (PPF) shows the various combinations of goods an economy can produce using all of its available resources and the best technology available. While we are more use
- Given below is a production possibilities combination of a hypothetical economy producing under conditions of efficiency, contact technology, and constant level of resources. The economy is faced with
- A reason the production possibilities frontier exists is: a. scarcity of resources and unlimited technology. b. unemployment. c. scarcity of resources. d. unlimited resources and technology.
- A production possibilities frontier will shift outward for all of the following reasons except: A) an increase in the stock of capital. B) a technological improvement. C) opportunity cost is increasing. D) an increase in the labor force. E) none of th
- Which of the following will cause the production possibilities curve for two goods to shift to the left? Select one: a. An increase in the amount of resources needed to produce the goods. b. A decrease in the technology used to produce the goods. c. An
- The long-run aggregate supply curve (LRAS) is Y = Y_f, which depends on the amounts of resources and the level of technology innovation. If a country has more resources and better technology, which of the following is true? A. The LRAS curve will shift to
- A non-linear (bending) production possibilities model assumes that A. Some land or labor is more productive in one use than another B. Technology can advance C. the opportunity cost of producing more of something will remain constant
- Three possible sources of growth in per capita output are: a. Population growth b. Capital accumulation c. Technological progress Which factors can account for continuing growth in per capita output once the long-run steady state has been reached? Explain
- The [{Blank}] shows the economy's potential growth rate as determined by the real factors of production and the technology or new ideas that allow these factors to become more productive over time. a
- Different types of labor, capital, and natural resources have different capabilities to produce goods and services. In the Production Possibility Frontier (Curve) model, this phenomenon implies an) [{Blank}] opportunity cost and a [{Blank}] shaped curve.
- Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. Given current resources and technology, the attainable range is best described as:
- Economic growth causes the: A. a production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward. B. production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward. C
- Which of the following would most likely shift the production possibilities curve inward? a. An increase in the number of hours factories are in use b. An increase in the production of capital goods c. Technological progress d. A decrease in the ave
- 45. The production possibilities curve represents the set of all A). Feasible combinations of goods that the economy can produce given that a nation?s resources are fully employed B). factors of produ
- Describe the production possibilities curve implications for an economy that doesn't devote current resources towards the production of capital.
- The long-run aggregate supply curve (LRAS) is Y = Yf, which depends on the amount of resources and the level of technology innovation. If a country has more resources and better technology, which of the following is true? A. The LRAS curve will shift to
- Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)? a. Capital goods produced at the exact rate needed to repl
- Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)? a. Capital goods produced at the exact rate needed to rep
- 1. A production possibilities frontier can shift outward if a. resources are shifted from the production of one good to the production of the other good. b. the economy abandons inefficient producti
- Which assumption about the firm's production technology implies that the revenue curve, when plotted as a function of labor, is upward-sloping? a. More inputs lead to more outputs. b. Marginal product of labor decreasing in labor. c. Marginal product of l
- a. Draw a production possibilities curve for a hypothetical economy producing capital and consumer goods. b. Suppose a major technical breakthrough occurs in the capital goods industry and the new tec
- Any point inside a production possibilities curve gives what indication about the subject economy? a. That it is efficient b. That unemployment is decreasing c. That production levels are increasing d. That it is inefficient
- On a production possibilities curve, unemployment is represented by: a. a point on the production possibilities curve. b. the points at which the production-possibilities curve touches each axis. c. a point below or to the left of the production possibili
- When constructing a production possibilities frontier, which of the following assumptions is not made? a. The economy produces only two goods or two types of goods. b. Firms produce goods using factors of production. c. The quantities of the factors of pr
- On a production possibilities curve, growth is represented by: a. a movement down the production possibilities curve. b. a movement up the production possibilities curve. c. an outward shift of the production possibilities curve. d. an inward shift of the
- Which of the following is true of the production possibilities curve? a. It assumes a fixed quantity of resources. b. It assumes the prices of the products considered are equal. c. A point inside the curve is efficient. d. All of the above are correct.
- Along a production possibilities curve showing capital and consumption goods production, which of the following pairs are being held as fixed? A.Unemployment and capital goods production. B.Technology and the number of resources. C.Composition of the e
- The production possibilities curve will shift outward, upward, and \ or, to the right when? A) corporate profits increase. B) Economic growth occurs. C) Resources are used more efficiently. D) there is a reduction in labour.
- A nation's production possibilities curve might shift up and outward as a result of: a. Depletion of natural resources. b. The exhaustion of its soil fertility due to over-planting and over-grazing. c. Technological advance. d. A natural disaster, lik
- In general, the higher the proportion of resources devoted to technological research in an economy, the _______. (a) faster the production possibilities frontier will shift inward (b) closer it will come to have a comparative advantage in the production o
- An increase in an economy's productive resources a. implies that the law of increasing costs no longer applies. b. shifts its production possibilities curve inward. c. shifts its production possibilities curve outward. d. has no effect on its production p
- As you move from one efficient point on the production possibilities frontier (PPF) to another efficient point on the PPF, you experience a. decreasing relative cost. b. opportunity cost. c. macroeconomics. d. unlimited resources. e. unattainable combinat
- A war would most likely: a. Make the production possibilities curve flatter b. Shift the entire production possibilities curve outwards c. Shift both of the economic sectors' intercepts inwards d. Make the production possibilities curve steeper
- Increasing opportunity costs of producing goods imply that the production possibilities curve will be: a. downward sloping. b. upward sloping. c. bowed inward. d. bowed outward.
- Which of the following are factors of production? a. Capital and land b. Scarcity and shortages c. Technology and productivity d. Economics and business decisions
- Economic growth could be portrayed as: a. Inward shift from the production possibilities Frontier b. outboard shift from the production possibilities Frontier c. movement from one point to another poi
- Draw a production possibilities curve with public goods on the vertical axis and private goods on the horizontal axis. Assuming the economy is initially operating on the curve, indicate how the production of public goods might be increased. How might the
- Economic growth can be depicted on a production possibilities frontier (PPF) as an: a. inward shift of the PPF. b. outward shift of the PPF. c. inward rotation along the x-axis. d. inward rotation along the y-axis. e. increase in opportunity cost.
- A non-linear ("bending") production possibilities model assumes that: a. technology can advance. b. all combinations of output are possible c. the opportunity cost of producing more of something will remain constant. d. some land or labor is more producti
- A production possibilities curve shows A. that people prefer one of the goods more than the other. B. that resources are unlimited. C. the maximum amounts of two goods that can be produced assuming the full and efficient use of available resources. D. com
- A production function is: a. a technique for determining the most profitable rate of output b. the relationship between resource inputs and product output c. an important factor in determining the shape of the long-run supply curve d. All of these.
- When drawing a production possibilities frontier, which of the following is held constant? a. the amount of money in the economy b. the prices of goods and services c. the quantity of the goods and services that are produced d. the available factors of pr
- When drawing a production possibilities frontier, which of the following is held constant? A. the amount of money in the economy B. the prices of goods and services C. the quantity of the goods and services that are produced D. the available factors o
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