1.Economic Problem Problem of choice or a problem of allocation of resources is the major economic problem which arises due to scarce resources and alternative uses of resources. Production Possibilities Curve â a graph that shows alternative ways to use an economyâs resources â does not show consumer satisfaction. A point above the curve indicates unattainable with the available resources. Draw a PPC demonstrating what a point on, inside and outside of the curve represents. Figure 2.9 Efficient Versus Inefficient Production. Answer: The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. 1. Figure 1 shows the production possibilities curve for Alpha, which makes two products: weapons of mass destruction and food. To discuss the economic importance of the law of increasing opportu-nity cost. Scarcity, Choice, and the Production Possibilities Curve Chapter Exam Instructions. A point below the curve means the production is not utilising 100 per cent of the âbusinessâs resources. Production Possibility Curves Objectives 1. Define a production possibilities frontier (curve). 1. Choose your answers to the questions and click 'Next' to see the next set of questions. Production Possibilities Frontier â the line on a production possibilities graph that The Shape Of The Production Possibility Curve Depends On The Relationship The Two Uses Share. 4. Definition & Example Production Possibilities Curve Answers Directions: Use the information in FIGURE 1 PPC to answer the following questions about the Alpha economy. 2. Production Possibility Curve has the following basic properties : Production Possibility curve slopes Downward: PPC curve slopes downward from left to right. Introduction Important Questions for Class 12 Economics Central Problems of An Economy, Production Possibility Curve and Opportunity Cost. The Particular Area In Question Can Be Used For Timber Production And/or Recreation. Use slides 3-14 for notes over the production possibilities curve. Explain the difference between a bowed out PPC and a straight line PPC. Production Possibility Curve. The following diagram (21.2) illustrates the production possibilities set out in the above table. To understand the economic implication of the production possibility curve model. Our experts can answer your tough homework and study questions. With this meaning we have several other aspects also to ⦠Production Possibilities Curve Example. It is a model of a macro economy used to analyze the production decisions in the economy and the problem of scarcity. To define the implications of scarcity in an economic system. To define the meaning of production possibility curves. If a company produces 20,000 watermelons and 1,20,000 pineapples. 3. 3. Question: The Multiple Use Decision Between Two Possible Outputs Can Be Illustrated Through The Use Of The Production Possibility Curve. Questions you should be able to answer after the lesson. 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 the economy can produce with a given amount of resources. Production Possibilities Frontier Production Possibilities Frontier is the line that shows the maximum possible output for that economy. Because, at the situation of full utilization of given resources, the production of both goods cannot be increased. On the diagram, its point B. 5. Curve showing all combinations of two goods that can be produced with resources and technology available Societyâs choices are limited to points on or inside the PPF Ask a question. Related link: What is Demand? 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