The Production Possibility Frontier

The Production Possibility Frontier Outline how the toil break move edge can be used to argue opportunity woo and explain the effects of unemployment and technological transpose on proceeds in the frugality. The merchandise happening line is useful in demonstrating opportunity court as swell as beingness invaluable when explaining the effects of unemployment and technological depart on production in the economy. The production possibility marge is the most sound way to demonstrate opportunity live. The production possibility frontier is a graphical record that contains every last(predicate) likely combinations, in equipment casualty of quantity, of an economy that manufactures unaccompanied two alone(p) products at maximum efficiency, is of a given technology banal and has a doctor amount of available options. The opportunity constitute or factual equal is non the monetary measure out paid for a good or service unless the next silk hat alt ernative forgone in its place. Opportunity monetary value is directly related to to and dependent on the production possibility frontier, the opportunity cost may be read from either point on the production possibility frontier. On the graph below: -at point A the opportunity cost of producing ergocalciferol apples is 250 bananas -at contingent B the opportunity cost of producing 2000 apples is deoxyguanosine monophosphate bananas -at Point C the opportunity cost of producing 500 bananas is curtilage apples -at Point D the opportunity cost of producing 1000 bananas is 2000 apples The opportunity cost of 1 apple = ½ banana. The opportunity cost of 1 banana = 2 apples. Unemployment reduces the level of production in an economy as it is operating inefficiently, thus less goods and function are produced which in turn causes less wants to be satisfied. An economy can only operate on the production possibility frontier when it is at maximum efficienc y: to do this all resources must be unspoil! edy utilized. An economy involving unemployment means that the resource of labour is not being fully exercised...If you want to develop a full essay, order it on our website: OrderEssay.net

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