Mexico 232 Unit 10 Essay
Hando, Sara L. ECON 232
Homework (Essay) 10.25.2014
1) A production point beyond the production possibilities frontier represents what?
Points outside the frontier are unattainable. These points describe wants that can’t be satisfied.
2) Explain how the production possibilities frontier illustrates scarcity.
The production possibilities frontier illustrates scarcity through showing us that if there is a production point beyond the PPF then, it is unattainable. Meaning, we can’t make a lot of everything due to how we allocate our resources. We could make a lot of scarves but then we’d have to give up gloves and vice versa.
3) "If Mexico is currently operating at a point beyond its production possibilities …show more content…
Briefly explain your answer.
True, if there is a point inside its production possibilities that would mean that you are inefficiently using your resources. It would be more efficient and good for production if you employed them because it would help increase production.
5) Explain the connection between opportunity cost and the PPF.
The PPF makes the idea of an opportunity cost more precise since it enables us to calculate the opportunity cost. Along the PPF, there are only two goods so there is only one alternative forgone: some quantity to another good.
6) Explain why the production possibilities frontier bows outward.
The PPF is bowed outward because resources are not all equally productive in all activities. Say in reference to the example I gave in question #2, those who are good at making gloves don’t necessarily mean that they are good in making scarves therefore, productivity would shift.
7) What economic concepts are represented in the production possibilities …show more content…
The marginal benefit curve has a negative slope because of a general principle that the more we have of any good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it. It decreases because many of us like variety. The more we consume one good or service, the more we tire of it and prefer switching to something else.
9) Compare and contrast production and allocative efficiency.
We achieve production efficiency at every point of the PPF and it happens when the economy is using all of its resources efficiently in order to produce the greatest output for the smallest input. Allocative efficiency on the other hand, is when good and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit.
10) "If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain.
True if the point is the best point on the PPF.
11) What factors generate economic growth?
Capital Accumulation and technological change generate economic growth.
12) What is comparative advantage? Give an
Homework (Essay) 10.25.2014
1) A production point beyond the production possibilities frontier represents what?
Points outside the frontier are unattainable. These points describe wants that can’t be satisfied.
2) Explain how the production possibilities frontier illustrates scarcity.
The production possibilities frontier illustrates scarcity through showing us that if there is a production point beyond the PPF then, it is unattainable. Meaning, we can’t make a lot of everything due to how we allocate our resources. We could make a lot of scarves but then we’d have to give up gloves and vice versa.
3) "If Mexico is currently operating at a point beyond its production possibilities …show more content…
Briefly explain your answer.
True, if there is a point inside its production possibilities that would mean that you are inefficiently using your resources. It would be more efficient and good for production if you employed them because it would help increase production.
5) Explain the connection between opportunity cost and the PPF.
The PPF makes the idea of an opportunity cost more precise since it enables us to calculate the opportunity cost. Along the PPF, there are only two goods so there is only one alternative forgone: some quantity to another good.
6) Explain why the production possibilities frontier bows outward.
The PPF is bowed outward because resources are not all equally productive in all activities. Say in reference to the example I gave in question #2, those who are good at making gloves don’t necessarily mean that they are good in making scarves therefore, productivity would shift.
7) What economic concepts are represented in the production possibilities …show more content…
The marginal benefit curve has a negative slope because of a general principle that the more we have of any good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it. It decreases because many of us like variety. The more we consume one good or service, the more we tire of it and prefer switching to something else.
9) Compare and contrast production and allocative efficiency.
We achieve production efficiency at every point of the PPF and it happens when the economy is using all of its resources efficiently in order to produce the greatest output for the smallest input. Allocative efficiency on the other hand, is when good and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit.
10) "If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain.
True if the point is the best point on the PPF.
11) What factors generate economic growth?
Capital Accumulation and technological change generate economic growth.
12) What is comparative advantage? Give an