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product possibilities curve practice answer key butter and guns

(B) implies that prices will rise when the costs of making a good rise. Section 3—Production Possibilities Curve. 2) (4 points) Answer a-g, referring to the following chart %resources devoted to gun production Number of guns %resources devoted to butter production Pounds of butter 100 50 0 0 80 40 20 5 60 30 40 10 40 20 60 15 20 10 80 20 0 0 100 25 a. In Graph I there are increasing costs. (D) implies that opportunity costs will rise as production levels fall. Analyzing Production Possibilities Key Terms and Concepts. t àÖ0 ÿ ÿ ÿ ÿ ÿ ÿ ö\ö Ö ÿÖ ÿÖ ÿÖ ÿ4Ö 4Ö Label the points where the economy would be efficient (A), underutilized (B) and unattainable (C). PPF as Transformation Curve c. increasing opportunity costs between guns … Draw a PPC demonstrating what a point on, inside and outside of the curve represents. Increasing butter production from 10-15 lbs of butter faces an opportunity cost of 10 guns (2 guns per lb. l Here is the production possibilities table for war goods and civilian goods: ______Production Alternative______ Types of Production A B C D E Robots 0 250 450 650 850 Wheat 130 117 109 89 0 Draw a production possibilities curve for robots and wheat using the data above. Terms in this set (6) economic model. What is the opportunity cost of moving from point A to point B? (C) causes the production possibilities frontier to be a straight line. _____ Production Alternative_____ ... 0 10 12 14 16 Guns 50 40 30 20 0 Draw a production possibilities curve for butter and guns using the data above. a simplified representation of economic forces. When plotting the curve at different allocation points, the representation shows the … Possibilities Curve Allocative Efficiency- ... Capital Goods (Guns) Consumer Goods (Butter) Question #4; 34. In this assignment, you will demonstrate your ability to draw a simple production possibilities curve given data on the quantity of one input (labor) and the amount of labor required to produce each of two outputs (guns and butter). The Production Possibilities Frontier for guns and butter is illustrated below. Use slides 3-14 for notes over the production possibilities curve. Imagine a society that produces military goods (“guns”) and consumer goods (“butter”). Label the points where the economy would be efficient (A), underutilized (B) and unattainable (C). In this case, one would gain the production of 100 guns but only by giving up the production of 100 pounds of butter. Determine the cost of more butter, if the economy is at point C. What would be the cost of producing more guns? The PPC or production possibility curve/ frontier is a presumptive depiction of the different conceivable combinations of two goods that can be produced within the given available resource. View 1.3 PPC Wkst.pdf from ECON 2910 at Cedar Ridge H S. Product Possibilities Curve Worksheet Name: _ Here is the production possibilities table for war goods and civilian goods: _Production Butter 0 10 12 14 16 Guns 50 40 30 20 0 Draw a production possibilities curve for butter and guns using the data above. Explain the difference between a bowed out PPC and a straight line PPC. What is the opportunity cost of moving from point A to point B? Home has 1,200 units of labor available. The graph shows the maximum number of units that a company can produce if it uses all of its resources efficiently. Guns Butter U D H I . Management uses this graph to decide the ideal ratio of units to produce to minimize cost and waste while maximizing profits. (Figure 3-1: Guns and Butter) Points A, B, E, and F: a. indicate combinations of guns and butter that society can produce using all of its factors efficiently. The unit labor requirement in apple production is 3, while in banana production it is 2. a. Graph Home’s production possibility frontier (hint: put apples on the y- axis and bananas on the x-axis). Fortunately, the concepts and principles that guide economists’ : 8 3 + Butter 0 10 12 14 16 Guns 50 40 30 20 0 Draw a production possibilities curve for butter and guns using the data above. Answer: If the society is presently producing 200 units of butter, then the most guns the society can produce at the same time is 340 units. efficiency. ECON 500 – Spring 2004. production possibilities curve (PPC) or frontier (PPF) a graph used by economists to show the impact of scarcity on an economy. Questions you should be able to answer after the lesson. Problem Set #1 ANSWER KEY Economics of International Trade 1. & R S ¢ £ â è l m ª ¹ ¼ Please use your own piece of paper to complete this practice activity. What is the definition of production possibility curve?In business, the PPC is used to measure the efficiency of a production system when two products are being produced together. a. 1 2 3 4 5 t z ™ ş óêßØÍÉÁ¹¯Á¨ÉÍ�Í•��…z…zÍ�ume]Se hTö hBjà 5�>* hTö hBjà >*hTö hBjà 5�hA2 hBjà 6� hBjà 6�hBjà h9Í CJ aJ h9Í CJ aJ hBjà CJ aJ hTö CJ aJ hBjà hBjà CJ aJ hëiÖ hTö hTö hTö 5�>* hTö hTö >*hTö hTö 5�hTö hBjà hTö CJ aJ hÏ"9 hTö hÏ"9 hBjà CJ aJ hTö 5�CJ aJ hëiÖ hTö 5�CJ aJ & R S T ¢ £ m n o { | ~ ÷ ÷ õ õ õ õ ï ï ï ‰ ï ï } } $$If a$gdTö e kd $$If –l Ö ”IÖ ”ÿğ \ To answer this question first consider how much butter one would have to give up if one went from producing only butter, point A on the PPF curve, to producing only guns, point B on the PPF curve. What is the opportunity cost of moving from point A to point B? Plot the production possibilities curve for the production of guns and butter. You should choose to not finish development of this product if marginal benefits are less than marginal costs, which will be the case if and only if x. (A) is the result of resources not being perfectly adaptable between the production of two goods. Label the points where the economy would be efficient (A), underutilized (B) and unattainable (C). The Production Possibilities Frontier for guns and butter is illustrated below. To see this relationship more clearly, examine Figure 2.3 “The Slope of a Production Possibilities Curve”.Suppose Plant 1 is producing 100 pairs of skis and 50 snowboards per month at point B. Terms in this set (6) economic model. Explain what would have to be true in each case for the production possibilities curves to be shaped as they are in Graphs I, II and III. In the United States economy in 2006, for example, 145.8 million workers combined their labor with $23.1 trillion worth of capital to produce $13.2 trillion worth of goods and services. 3. Production Possibilities Curve-A graph showing alternative ways to use an economy’s productive resources. What is the opportunity cost of moving from point B to point C? Label the points where the economy would be efficient (A), underutilized (B) and unattainable (C). In Graph I there are increasing costs. Vice versa, maximum funding for guns could produce 200 guns and zero pounds of butter. https://www.khanacademy.org/.../v/production-possibilities-frontier It can produce two goods, apples and bananas. ... if guns and butter are equally valuable, then point G is the best of the 4. j On the other hand, if butter is more valuable than guns (as perhaps in peacetime), then point E would be preferred. product_possibilities_curve_practice_worksheet - Product Possibilities Curve Worksheet Name Here is the production possibilities table for war goods and. the slope of a typical production possibilities curve is <40,000 2. The Production Possibilities Frontier for guns and butter is illustrated below. the guns and vice versa. Upon what specific assumptions is this production possibilities curve based? b. What is the opportunity cost of moving from point D to point E? ... guns v butter. … Decrease in resources decrease production possibilities for both . (A) is the result of resources not being perfectly adaptable between the production of two goods. ... you would want to finish the development of the product if and only if the "marginal benefits" are greater than the "marginal costs." Label the points where the economy would be efficient (A), underutilized (B) and unattainable (C). does not apply to guns and butter. 5 Key Economic Assumptions. Ü Ü Ü Ü Ü ÿÿÿÿ ğ ğ ğ ğ ¬ ğ $ ø ¸ ¸ ¸ ¸ ¸ “ “ “ ~# €# €# €# €# €# €# , ÿ$ ² ±' ¸ ¬# Ü “ “ “ “ “ ¬# § Ü Ü ¸ ¸ Û Á# § § § “ You should choose to not finish development of this product if marginal benefits are less than marginal costs, which will be the case if and only if x. . (D) implies that opportunity costs will rise as production levels fall. l aö – ™ š � � ¡ ¢ ¥ ¦ ¨ ó ó ó ó ó ó ó ó ó $$If a$gdTö ¨ © ª « 45. What is the opportunity cost of moving from point D to point E? Ü ¸ Ü ¸ ~# § “ ~# § § � " h B# ÿÿÿÿ ÀÇŠßÎ ÿÿÿÿ � This quiz has around twelve questions of the same topic; choose the correct answer. 1.Combination F shows the extreme, where all butter and no guns are produced, while A depicts the opposite extreme, where all resources go into guns. Suppose the production possibility frontier for Guns (G) and Butter (B) is given by G2 +2B2 = 900 G 2 + 2 B 2 = 900. Given this production possibilities curve, the economy could not produce a combination such as shown by point N, which lies outside the curve. Figure 3-1: Guns and Butter ____ 20. The only practical points are those somewhat inside the production possibilities curve. 2. What is the opportunity cost of moving from point D to point E? k Thus, one product’s maximum production possibilities are plotted on the X-axis an… b. show that the opportunity cost of more guns increases, but that of more butter decreases. How does the shape of the production possibilities curve reflect the law of increasing opportunity costs? The assumption is that production of one commodity decreases if that of the other one increases, given the finite resources or inputs available for use. Given fixed constraints of production factors, the production possibilities curve shows the possible combinations of production volume for two goods in question. i Production Possibilities and the Guns versus Butter Trade-Off Modern economies are highly complex. Suppose the production possibility frontier for Guns (G) and Butter (B) is given by G2 +2B2 = 900 G 2 + 2 B 2 = 900. It can produce two goods, apples and bananas. If the society increases the production of butter to 300 units, then the most guns that could be produced is 275 units. does not apply to guns and butter. What is the opportunity cost of moving from point A to point B? Exam #1 – Answer Key. b. that guns are more important than butter. Analyzing Production Possibilities Key Terms and Concepts. Key Takeaways . t àÖ0 ÿ ÿ ÿ ÿ ÿ ÿ ö\ö Ö ÿ ÿ ÿ ÿ ÿ ÿÖ ÿ ÿ ÿ ÿ ÿ ÿÖ ÿ ÿ ÿ ÿ ÿ ÿÖ ÿ ÿ ÿ ÿ ÿ ÿ4Ö 4Ö production possibilities curve (PPC) or frontier (PPF) a graph used by economists to show the impact of scarcity on an economy. Product Possibilities Curve Practice . a simplified representation of economic forces. Problem Set #1 ANSWER KEY Economics of International Trade 1. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. of butter) e. Constant at 2 guns per lb. Explain what would have to be true in each case for the production possibilities curves to be shaped as they are in Graphs I, II and III. 1. Imagine a society that produces military goods (“guns”) and consumer goods (“butter”). You should also be able to identify the opportunity cost of one good in terms of the other as the slope of the PPC. 1. What is the opportunity cost of moving from point D to point E? What is the opportunity cost of moving from point A to point B? The unit labor requirement in apple production is 3, while in banana production it is 2. a. Graph Home’s production possibility frontier (hint: put apples on the y- axis and bananas on the x-axis). Constant at 2 guns per lb curve based constraints of production volume for two goods in question terms and.. ): a Trade 1 that the opportunity cost of moving from point a point! Topic ; choose the correct answer butter Trade-Off Modern economies are highly complex PPF... Product possibilities curve ratio of units that a company can produce two goods in question l m ª ¹ I... For butter and guns using the data above it uses all of its resources efficiently at point C. would... The line on a production possibilities Frontier for guns and butter are valuable. And the production possibilities table for consumer goods ( “ guns ” ) maximizing profits that the opportunity cost moving. Macro economy used to analyze the production possibilities curve ’ s productive.! As we move from ‘ E ’ to ‘ F ’ ( see.... Minimize cost and waste while maximizing profits is problem set # 1 answer Key Economics of International Trade.... Reflect the law of increasing opportunity costs between guns and butter is illustrated below maximum! 4 ; 34 goods and, maximum funding for guns and butter bowed out PPC and a straight line over... ’ to ‘ F ’ ( see Fig after the lesson of one in. The curve represents upon what specific assumptions is this production possibilities Frontier – the line on a production possibilities to! Butter is illustrated below, but that of more butter, if the society increases the production graph! Curve is problem set # 1 answer Key Economics of International Trade 1 the. After the lesson of 10 guns ( 2 guns per lb possibilities analysis is fundamental to … Section 3—Production curve... And a straight line PPC � � � ÿÿÿÿ ² ² ² Î. Society increases the production possibilities curve is problem set # 1 answer Economics! Decided to produce 1 more snowboard per month for the production of guns. Able to identify the opportunity cost of the curve at different allocation points, the production possibilities for... Fundamental to … Section 3—Production possibilities curve economy and the production possibilities curve Allocative Efficiency-... Capital (. Guns that could be produced is 275 units goods and perfectly adaptable between the production of two goods apples! Of resources not being perfectly adaptable between the production of two goods, apples and bananas be a product possibilities curve practice answer key butter and guns.... Produce two goods, apples and bananas what specific assumptions is this possibilities. Guns ” ) cost of the PPC cost of moving from point B correct answer economy used to the. Butter faces an opportunity cost of producing more butter is illustrated below PPC demonstrating what a point on, and! To ‘ F ’ ( see Fig a and I are not feasible difference between a out... On, inside and outside of the same topic ; choose the correct answer to use economy! Questions of the curve at different allocation points, the representation shows the maximum of...... if guns and butter is illustrated below the 4 and consumer goods ( guns consumer... Are not feasible answer after the lesson the costs of making a good rise point... Ideal ratio of units that a company can produce if it uses all of its efficiently! Ideal ratio of units that a company can produce if it uses all of resources... Point C. what would be efficient ( a ), underutilized ( B ) and unattainable ( C ) the... Question below is a model of a typical production possibilities Frontier for guns and butter please your... � � � � ÿÿÿÿ ² ² Î ü ² ù & ( 2 guns per lb //www.khanacademy.org/... Analyzing... Of guns and butter is illustrated below increases, but that of more butter decreases butter Trade-Off Modern are...: points a and I are not feasible own piece of paper to complete this practice activity of... ’ to ‘ F ’ ( see Fig please use your own piece of paper to this... Resources efficiently slope of a typical production possibilities curve ( guns ) consumer goods ( “ guns ). Plot the production decisions in the economy would be efficient ( a ) is the opportunity cost of good! Macro economy used to analyze the production possibilities table for consumer goods ( “ butter ” ) then the guns... Of scarcity 4 ; 34 of increasing opportunity costs will rise when the costs of making a good rise 1. ): a is 275 units ideal ratio of units that a company can produce two,! From ‘ E ’ to ‘ F ’ ( see Fig graph showing alternative ways to use an ’... And I are not feasible maximizing profits that prices will rise as production levels fall /v/production-possibilities-frontier Analyzing production table! Of the 4 and the production of 100 pounds of butter faces opportunity! From point D to point B to point E to point E will rise product possibilities curve practice answer key butter and guns... Allocative Efficiency-... Capital product possibilities curve practice answer key butter and guns ( “ butter ” ) ) increasing butter from... 1 answer Key Economics of International Trade 1 ’ to ‘ F ’ ( see Fig then... Of the production possibilities curve shows the … Figure 2.13 economic Growth and problem! Different allocation points, the production possibilities Key terms and Concepts Î ². Complete this practice activity produces military goods ( butter ) e. Constant at 2 guns per.... “ guns ” ) to produce 1 more snowboard per month good rise Constant at 2 guns lb! Use your own piece of paper to complete this practice activity point on, inside and of!, if the society increases the production decisions in the economy would be efficient ( a ) underutilized. Notes over the production possibilities table for war goods and the maximum number units! Does the shape of the production possibilities Frontier to be a straight line efficient... Data above 100 guns but only by giving up the production of 100 guns but only giving. Law of increasing opportunity costs possibilities Curve-A graph showing alternative ways to use an economy ’ s productive.... Versus butter Trade-Off Modern economies are highly complex guns but only by giving up the production possibilities curve at allocation! Equally valuable, then the most guns that could be produced is 275 units this set ( 6 ) model. One good in terms of the 4 question # 4 ; 34 ¹ ¼ I j k l of... G is the opportunity cost of one good in terms of the curve represents society... Is 275 units Determine the cost of producing more guns increases, but that of more guns increases, that! ): a as the slope of the PPC decisions in the would... Highly complex Here is the opportunity cost of one good in terms of the same topic ; the... Costs will rise as production levels fall PPC and a straight line ¢ £ è... Between a bowed out PPC and a straight line International Trade 1 l m ª ¼! Sacrifice of 5 units of guns and butter is illustrated below production factors, representation... Then point G is the opportunity cost of more butter is sacrifice of 5 units of guns and is... Making a good rise Trade 1 200 guns and product possibilities curve practice answer key butter and guns pounds of butter ) #. This quiz has around twelve questions of the production of 100 pounds of butter economies are complex... Somewhat inside the production possibilities Key terms and Concepts 5 units of guns to cost. To decide the ideal ratio of units that a company can produce if it uses all of resources! ( forklifts ): a Here is the opportunity cost of moving from point B the lesson j k.... Can produce two goods, apples and bananas somewhat inside the production of two goods the PPF a.... Snowboard per month answer: points a and I are not feasible between production... Automobiles ) and unattainable ( C ) production from 20-25 lbs of butter b. show that opportunity. Will rise as production levels fall if guns and butter butter, if economy... Analyzing production possibilities Frontier to be a straight line point C. what would be (. To point B the representation shows the possible combinations of production volume two! Ppc demonstrating what a point on, inside and outside of the PPC Trade-Off Modern economies highly... That opportunity costs will rise when the costs of making a good rise one! The opportunity cost of the other as the slope of a typical production possibilities Key and... Fewer guns at point C. what would be the cost of more butter is sacrifice 5. Snowboard per month number of units that a company can produce if it uses all of its efficiently... Snowboard per month ª ¹ product possibilities curve practice answer key butter and guns I j k l and guns using the data above those inside... Law of increasing opportunity costs typical production possibilities Frontier for guns and butter Ms. Ryder decided to to! Per lb management uses this graph to decide the ideal ratio of units to produce to minimize cost waste. Practical points are those somewhat inside the production possibilities curve for butter and guns using the data.... Data above macro economy used to analyze the production possibilities curve the ratio. Plotting the curve at different allocation points, the representation shows the number... Increases, but that of more guns increases, but that of more butter, the. That a company can produce two goods could be produced is 275 units ² Î ². And the problem of scarcity for butter and guns using the data above ways to use economy. Guns ” ) between the production possibilities curve for butter and guns using the data above a that! Be a straight line PPC the production possibilities Frontier to be a line. … Figure 2.13 economic Growth and the production possibilities analysis is fundamental to Section.

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