Production Possibilities Model Graded Assignment | Back to Assignment Due Sunday
ID: 1155647 • Letter: P
Question
Production Possibilities Model Graded Assignment | Back to Assignment Due Sunday 06.24.18 at 11:45 PM Attempts: 1. Efficiency in the production possibilities model Suppose Spain produces wheat and laptops. The following graph shows Spain's current production possibilities Keep the Highest: 6 frontier (PPF) and six output combinations (black X symbols) labeled A to F LAPTOPS (Millions per yearl 100 80 60 40 20 PPF 20 4 680 100 WHEAT IMetlions ef tons per year) Which points on the graph represent output combinations that are inefficient? Which points on the graph represent output combinations that are effidient in production? Which points on the graph represent output combinations that are unattainable? NA 3.16 2004-2016 Aga AB rigns reserved Craphs Tool 1.55 2002-2013 Cengage Leaning ged 013 Cenage Learting except as noted All inghts reserved Grade It Now Save & ContinueExplanation / Answer
PPC shows the different combinations of 2 goods that are produced within the economy with the resources available to it. To increase quantity of one good, quantity of second good have to be reduced. All the resources are fully and efficiently and technology is given.
1. Point E and F represent the inefficient combination of output. This is because here, some of its outputs are unemployed or they are employed inefficiently.Here, if we want to move to point C or D then we can move there without decreasing quantity of any good.
2. Point C and D represent efficient combination of output.Because if we want to move on the curve then it is possible only by reducing quantity of any one good. Also, here resources are fully and efficiently employed.
3. Point A and B are unattainable combinations of output. As we don't have that much resources to move to those points.
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