Answer: The negative slope of the production possibility curve illustrates the concept of opportunity cost . The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the Select one: a. This lesson received the 2017 Curriculum Silver Award from the National Association of Economic Educators. How does the production possibilities frontier illustrate opportunity cost? Lesson summary: the production possibilities frontier. 【单选题】The production possibilities frontier illustrates 【判断题】If a country has a lower opportunity cost than its potential trading partner, the country should decide to be self-sufficient. The people of Econ Isle work hard to produce all those widgets and gadgets. Mythica, which is a hypothetical economy, produces only two goods – textbooks and computers. The production possibility frontier (PPF) is a graph that shows all maximum combinations of output that an economy can achieve, when available factors of production are used effectively. some resources are not being produced efficiently. Her production. To describe the concept of the production possibilities frontier, assume that we live on an island that has only two cities (Lake and Desert), and two industries (cars and airplanes). On the other extreme, if it used all of its resources to produce widgets, Econ Isle could produce 6 widgets, but no gadgets. An economy’s factors of production are scarce; they cannot produce an unlimited quantity of goods and services. It uses capital resources, which are goods that have been produced and are used to produce other goods and services. In this episode of the Economic Lowdown Video Series, economic education specialist Scott Wolla explains how the production possibilities frontier (PPF) illustrates some very important economic concepts. It can only consume what it produces. It illustrates the production possibilities model. The production possibilities frontier is a concept in the fields of both business analysis and macroeconomics. economic model Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. A Healthcare vs. Education Production Possibilities Frontier This production possibilities frontier shows a tradeoff between devoting social resources to healthcare and devoting them to education. The production possibility frontier is an economic model and visual representation of the ideal production balance between two commodities given finite resources. Although the production possibilities frontier—the PPF—is a simple economic model, it's a great tool for illustrating some very important economic lessons: The frontier line illustrates scarcity—because it shows the limits of how much can be produced with the given resources. Click on the apple This situation illustrates our second lesson. Learn more about the Econ Lowdown Teacher Portal and watch a tutorial on how to use our online learning resources. Let's say Econ Isle increases its production of widgets to 5. Combinations of output that are inside the production possibilities … The short-run alternation between economic downturns, recessions, and economic upturns and expansions is known as the: b) the sustained upward trend in aggregate output per person over several decades. Put differently, to increase production by 1 widget, Econ Isle has to give up the production of 2 gadgets. Have you been to a frontier lately? All points that lie on the PPF are pareto efficient, whereas all points below the PPF are considered inefficient. A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or Transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time. The production possibilities frontier is the boundary between the attainable and unattainable combinations of goods and services. In addition to that, the PPF also illustrates the concept of Pareto efficiency. -affordable and unaffordable combinations of production. Below is the full transcript of this video presentation. b. there is a fixed quantity of resources and technology available. 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