The Production Possibility Frontier
Outline how the toil opening move edge can be used to demonstrate opportunity woo and explain the effects of unemployment and technological change on proceeds in the frugality.
The production possibility confines is useful in demonstrating opportunity court as well as beingness invaluable when explaining the effects of unemployment and technological change on production in the economy.
The production possibility frontier is the most sound way to demonstrate opportunity live. The production possibility frontier is a graph that contains every last(predicate) possible combinations, in equipment casualty of quantity, of an economy that manufactures only two unique products at maximum efficiency, is of a given technology standard and has a doctor amount of available options. The opportunity cost or factual cost is not the monetary value paid for a good or service but the next silk hat alternative forgone in its place. Opportunity cost is directly related to to and dependent on the production possibility frontier, the opportunity cost may be read from any point on the production possibility frontier.
On the graph below:
-at Point A the opportunity cost of producing 500 apples is 250 bananas
-at Point B the opportunity cost of producing 2000 apples is deoxyguanosine monophosphate bananas
-at Point C the opportunity cost of producing 500 bananas is curtilage apples
-at Point D the opportunity cost of producing 1000 bananas is 2000 apples
The opportunity cost of 1 apple = Â½ banana.
The opportunity cost of 1 banana = 2 apples.
Unemployment reduces the level of production in an economy as it is operating inefficiently, thus less goods and function are produced which in turn causes less wants to be satisfied. An economy can only operate on the production possibility frontier when it is at maximum efficiency: to do this all resources must be fully utilized. An economy involving unemployment means that the resource of labour is not being fully exercised...If you want to develop a full essay, order it on our website: Orderessay
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