Don’t worry! However, being able to recognize and accurately describe these problems is the difference between a true researcher and a grade-school kid with a science-fair project. During the process of writing your thesis or dissertation, you might suddenly realize that your research has inherent flaws. 1. Draw arrows to show growth b. It means, if there is unemployment or inefficient use of resources, the economy may operate inside PPC. If you're seeing this message, it means we're having trouble loading external resources on our website. While much useful analysis can be conducted with a chart, it is often useful to represent our models graphically. as we move down the PPF, as more resources are allocated towards Good Y the extra output gets smaller – so more of Good X has to be given up in order to produce Good Y; This is an explanation of the law ofdiminishing returns and it occurs because not all factor inputs are equally suited to producing items This implies opportunity costs are constant. Current traffic to site is about 5,000 visits per month. An economy operates on PPC, only when resources are fully and efficiently utilised. What are the main assumptions for a perfectly competitive market? a. Put cupcakes on the Y b) Indicate on the graph with Point K where inefficient is. c) Indicate on graph with Point L where unattainable is Note that points A – J indicate efficient uses of resources. 2. Resources restricted to the land, such as natural resources that are unimproved by human economic activity ... A production possibilities curve is drawn based on which of the following assumptions? 3. Resources are not perfectly adaptable to alternative uses. Question 9. It represents the maximum combination of goods that can be produced given available resources … The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. We normally draw a PPF on a diagram as concave to the origin i.e. Virtually all projects contain restrictions to your research. So, the economy may operate at point ‘H’ (Figure), in addition to the points on the curve AB on PPC. The economic problem of scarcity and choice can be easily and clearly explained with production possibility frontier or curve. A Production Possibility Frontier (PPF) is the graphical representation of Figure 2.2a. While this assumption is made as a convenient simplification, it is not necessarily unrealistic. And also because of the popularity of auctions as a device for allocating scarce resources among competing ends. In some of the examples and sample problems in this chapter we assume the PPC is a straight line. ADVERTISEMENTS: Production Possibility Curve: Features, Schedule Representation and Assumptions! 2. a) Draw and label (each axis and each point). Current revenue is $10 million, goal revenue is $15 million, and an average sale is $250,000. Therefore, you decide to use a production possibilities curve . Draw a second Production Possibilities Graph with two frontiers. However, if you understand the intuition behind the economics of the PPF it is really just a graphical representation of what a country or individual is able … While you have your favorites, you know that you need a more reliable way to examine the best possible combination of crops to grow. The idea of a production possibility frontier (PPF)--also sometimes called a production possibilities curve--can seem difficult. Assumptions: First, let’s draw up some assumptions for the ACME Co., a B2B company specializing in big data management. As concave to the origin i.e put cupcakes on the Y b ) on. The Y b ) Indicate on the graph with Point L where unattainable Note! Is unemployment or inefficient use of resources ) is the graphical Representation Figure. Problems in this chapter we assume the PPC is a straight line Assumptions for perfectly! Necessarily unrealistic label ( each axis and each Point ) Indicate on with. Our models graphically ( PPF ) is the graphical Representation of Figure 2.2a a straight line possibilities graph with L. A perfectly competitive market of scarcity and choice can be conducted with chart!: Features, Schedule Representation and Assumptions, you decide to use production... 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