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the concave shape of the production possibilities curve indicates that

Statistics and Probability – A General Introduction, Investing Basics – A Complete Beginners Guide, Introduction to management – Top 4 Functions, Fundamentals of Micro-Economics Course Objectives, The Shape of the Curve Illustrates the Point, Declining Marginal Output and Increasing Marginal Costs, The Meaning and Proper Use of Marginal Output, Shape of the Production Possibilities Curve With an Illustration, Shifts in the Production Possibilities Curve, Causes of Improvement in Manufacturing Capability, Causes of Decline in Manufacturing Capability, Production Possibilities Curve – A Summary, Comparative Advantage Explained With an Illustration, Trade Between Countries Using the Barter System, Consumption Possibilities Curve Explained, Gross Domestic Product and National Accounts, Calculating Gross Domestic Product for a Country, The Difference Between Capital Goods and Consumer Goods, Methods of Calculating GDP or Gross Domestic Product, Calculating GDP for a Country with Imports, Capital Investments Constitute a Nations Savings, Elasticity of the Supply and Demand Curve, The Connection between Price and Revenues, Supply and Demand in the Rest of the World, Progressive Taxation, Regressive Taxation and Flat Tax, The process by which the bank increases the money supply, The Effect of Michael’s Gift According to a Different Scenario, Appendix A- The Financial Statements of a Firm. The shade of a production Possibility Curve is concave (curved inwards) due to the increasing marginal opportunity cost. Because a company’s ability to produce two distinct items is not always equal, the chart reveals a bowed-shape curve … In order to increase production of one item, we must transfer resources from another sector. Note: slope of PPC = MRT. Increasing Marginal opportunity cost means producing an additional item requires the sacrifice of production of another … The Production Possibilities Curve demonstrates the phenomenon of scarcity: Manufacturing more of one product detracts from the production of another item. Money Market – What is money market fund? Point D shows that the country can produce no more than 800 guns, even if bread baking is completely discontinued. Refer to the above diagram. Which one of the following is a normative economic statement? The combinations of weapons and food can be illustrated by using a production possibility frontier (PPF) or called production possibility curve (PPC). Refer to the above diagram. In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which … In order to increase production of one item, we must transfer resources from another sector. The production possibilities curve is bowed in shape because of the law of increasing opportunity cost, which explains the idea that the more units of a … The Production Possibilities Curve demonstrates the phenomenon of scarcity: Manufacturing more of one product detracts from the production of another item. The Y axis indicates the quatity of bread. b. Q, R, view the full answer Q. - [Instructor] So we have three different possible production possibility curves for rabbits and berries here, which we've already talked about in other videos, but the reason why I'm showing you three different curves is because these three different curves clearly have different shapes, and we wanna think about why you would have and under what scenarios would you have these different shapes? The  X axis indicates the quantity of guns. The production possibility curve bows outward. Microeconomics focuses on specific decision-making units of the economy; macroeconomics examines the economy as a whole. Production Possibility Curve (PPC) will be concave to the origin because of the increasing opportunity cost. Answer: Increasing Explanation: The shape of the production possibilities curve is concave to the origin. Is a curve showing different production possibilities curve, consider the simple example shown in shape. 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