The steeper the slope, the greater ratio, and the greater is the opportunity cost of increasing the output of the good measured on the horizontal axis. Why is opportunity cost a ratio? The slope of the PPF is a ratio that expresses the quantity of lost production of the good on the y-axis to the increase in the production of the good on the x-axis moving downward along the PPF. This sacrifice is the opportunity cost of producing more of the first good. Units of a good requires that the output of another good must fall. Moving along the production possibility frontier, producing additional How does the production possibilities frontier illustrate opportunity cost? The negative slope of the production possibility curve illustrates the concept of opportunity cost. This observation reflects the result that a tradeoff must be made when producing output efficiently. How does the production possibilities frontier show that every choice involves a tradeoff? Movements along the PPF frontier illustrate that producing more of one good requires producing less of other good. Clearly, such points cannot be production efficient.
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Any point inside the frontier reflects production where one or both outputs may be increased without decreasing the other output level. These points are the maximum production points possible and are attained only by producing the goods and services at the lowest possible cost. How does the production possibilities frontier illustrate production efficiency? The combinations of outputs that lie on the PPF illustrate the concept of production efficiency.
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Additionally, while moving along the PPF to increase the production of one good requires that the production of another good be reduced, which also illustrates scarcity. There simply are not enough resources to produce any of these combinations of outputs. How does the production possibilities frontier illustrate scarcity? The unattainable combinations of production that lie beyond the PPF illustrate the concept of scarcity.
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