6. Specialization and production possibilities Suppose the United Kingdom produces only smartphones and cars. The resources that are used in the production of these two goods are specialized- that is, some resources are more suitable for producing smartphones than cars, whereas others are more suitable for producing cars than smartphones. The shape of the United Kingdom's production possibilities frontier (PPF) should reflect the fact that as the United Kingdom produces more cars and fewer smartphones, the opportunity cost of producing each additional car decreases The following graphs show two possible PPFS for the United Kingdom's ecc e PPF (PPF1) and a bowed-out PPF (PPF2). increases remains constant ? (? Graph 1 Graph 2 PPF2 PPF, CARS CARS Based on the previous description, the trade-off the United Kingdom faces between producing cars and smartphones is best represented by SMARTPHONES SMARTPHONES

6. Specialization and production possibilities Suppose the United Kingdom produces only smartphones and cars. The resources that are used in the production of these two goods are specialized- that is, some resources are more suitable for producing smartphones than cars, whereas others are more suitable for producing cars than smartphones. The shape of the United Kingdom's production possibilities frontier (PPF) should reflect the fact that as the United Kingdom produces more cars and fewer smartphones, the opportunity cost of producing each additional car decreases The following graphs show two possible PPFS for the United Kingdom's ecc e PPF (PPF1) and a bowed-out PPF (PPF2). increases remains constant ? (? Graph 1 Graph 2 PPF2 PPF, CARS CARS Based on the previous description, the trade-off the United Kingdom faces between producing cars and smartphones is best represented by SMARTPHONES SMARTPHONES

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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