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Why is the production possibility frontier concave? Be sure to explain economic intuition behind that fact.
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- What is the axiom of consumer choice that implies that consumers spend all their income in order to maximize utility? and Explain the main assumption behind a concave production possibilities frontierExplain the main assumption behind a concave production possibilities frontier.Give one example of external economics of scale?
- Consider a Production Possibility Frontier that bows outward. Suppose the production of one good increases. As a result opportunity cost of producing this good will __________ because productive resources ___________________ in their suitability for producing different kinds of goods. A. increase; differ B. decrease; are the same C. increase; are the same D. decrease; differExplain the main assumption behind a concave production possibilities frontier. No more than 3 linesIf it is not possible to increase the output of one good without decreasing the output of the other, when there are only two goods, thenthis situation would describe a point on a production possibilities frontier for the producer.the outcome can be described as efficient.there is no unemployment of resources.All of these outcomes are correct.
- The concept of production possibility frontier explains that a. any point within the curve is a combination of labor and capital input that fall short of putting all inputs to good use b. that capital is more that labor inputs c. any point within the curve is a combination of labor and capital input that is utilized d. that labor is more that capital inputs The concept of production possibility frontier explains that a. labor and capital combination is not enough to produce an output that have very minimal wastage b. level of output is optimal c. labor and capital combination is not enough to produce an output d. level of inputs is optimal more than zero but less than one in the concept of Income Elasticity means a. luxury goods b. substitute goods c. inferior good d. necessity goodsWhat is the difference between the Budget Constraint and Production Possibilities Frontier? How do you calculate the Opportunity Cost under each one?explain what role the production possibility frontier has in the decision making process
- Suggest assumptions of the Production Possibility FrontierCan the Production Possibility frontier be used to calculate opportunity cost?If yes, how?What does a Production Possibility Frontier for Product X versus Y represent? A) The total combined production of Product X + Product Y for a given set of factors of production B) The trade-off in the level of total production at various output mixes for Product X and Product Y C) The most efficient product production mix for a given set of factors of production D) All of the above