macroeconomics background information Points on the Curve and Trade-offs If an e
ID: 1095729 • Letter: M
Question
macroeconomics
background information
Points on the Curve and Trade-offs
If an economy is operating at a point on the production possibilities curve, all resources are
used, and they are utilized as efficiently as possible (points E, C, B, A, and D). If a country does not
use its resources efficiently (unemployment), then it is operating inside the production
possibilities curve (point G).
Any point on the curve illustrates an output combination that is the maximum that can be produced
with the existing resources and technology. It follows that output cannot increase if resources and
technology remain constant. When economists discuss the concept of scarcity, they mean that
resources are limited and that at any given point in time, production is limited. If an economy is
producing on the curve, increasing the production of one good or a category of goods always occurs
at the expense (opportunity cost or trade-off) of the production of another good or category of goods.
A point inside the curve, for example 300 guns and 350 roses (point G), represents an output
combination that is produced using fewer than the available resources (unemployment), or with all
the resources, but with the resources used inefficiently (underemployment).
Point F is a production combination that cannot be achieved with the existing resources. Over time,
the economy may grow and realize greater production capacities to produce, and we may get to
point F in the future. This will be discussed in the next section.
please use the above information to write a paper and answer the questins. Please read each question and answer it as required.
Write a 4- to 5-page paper that addresses the following questions. Be sure to use references within the paper to support your answers.
please provide references for external information.
Explanation / Answer
1. The production possibilities curve is an important model of how much an economy can produce given resources and technology.
a. What characteristic of the economy causes the production possibilities curve to bow outward. Explain.
The economy in today
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.