If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. Since human wants are unlimited and the means to satisfy them are limited, every society is faced with the fundamental problem of choosing and allocating its scarce resources among alternative uses. If production involves decreasing opportunity cost, the production possibilities curve A)is "bowed inward." c. increasing costs. Its simple why the PPF is represented on a curve and not on a line because the ability to show under production( i.e inside the PPF) or outward shift in the PPF because of improvement in technology can be represented on a straight line and it becomes difficult rather impossible to represent PPF on a straight line. B. law of constant opportunity costs applies. An outward shift of the PPC results from growth of the availability of inputs, such as physical capital or labour, or from technological progress in knowledge of how to transform inputs into outputs. If the production possibilities curve is a downward-sloping straight line, that would indicate? Join Yahoo Answers and get 100 points today. The PPF curve can be for a single company or producer, or for the economy as a whole. asked Jul 13, 2016 in Economics by Plotintro. View Answer. And here, it looks like it's bowed in to the origin, it's popping in in this direction. D. equal quantities of the two goods will be produced at each possible point on the curve. New booze tariffs about to take effect, Groundbreaking rapper, producer MF Doom dies at 49, Legal pot and more: 5 laws taking effect in 2021, Biden Secret Service agents switched over Trump links, NBA Spurs' Becky Hammon makes coaching history, How North Korea's Kim marked the new year. According to the graph above, the opportunity cost of producing 100 additional shell necklaces is Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. The PPF simply shows the trade-offs in production volume between two choices. Answer. If the production possibilities curve is a straight line: A. the two products will sell at the same market prices. The first is the fact that the budget constraint is a straight line. e … In Figure 1.5, if the opportunity cost of producing video games was zero at all levels of production, the production-possibilities curve would best be represented by a: A) Vertical straight line. Google Classroom Facebook Twitter. For the first question, the answer is D. The PPC represents what the economy could produce if there is full employment (i.e., if all resources are being used efficiently and to their full extent). Reduced resource availability. A production possibilities curve shows the combinations of two goods an economy is capable of producing. Why does the PPF have a … Is it best for capitalism to have someone be able to inherit 50 million dollars tax free simply by being born lucky rich into right family? Bernie’s PPF is a straight line, meaning that his resources are equally suited for either sweeping or scrubbing. But if you want to produce another unit, you have to give up more Y. 140,000 10,000 40,000 . B) technological change has increased. 31. This is known as opportunity cost. Inside the PPF curve is inefficient or involves unemployed workers. A production possibility curve measures the maximum output of two goods using a fixed amount of input. d. constant opportunity costs but increasing real costs. Production Possibility Curve (PPC) will be a straight line when _____. 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