Economics

Running head : ECONOMICS[Author s Name][Tutor s Name][Class]Question 1A8E76D54C32B1A051015202530F Fig . 1 . Production Possibilities CurveThe true production possibilities abridge is based on several specialised assumptions . First , the scrimping possesses extra resources and can produce limited amounts of goods and services . Second , people and the economy must necessitate which goods and services they go away produce and which they will sacrifice . trey , it is clear that the economy operates at full employment and maximum productive efficiency , with fixed resources and fixed technology , and produces moreover two types of different goods - automobiles and forklifts .

To promote and maintain its efficiency , the economy must always choose between the two best product outputs (for example , the economy can produce tho 6 automobiles and 12 forklifts , or 30 forklifts and no automobilesAt hitch C , the live of one more automobile will be equal to 4 .5 forklifts , trance the cost of an supererogatory forklift will not exceed 0 .22 automobiles . The form of the curve demonstrates the law of increasing opportunity costs : the opportunity cost of each additional unit will be great than the cost of the preceding one (Baumol Blinder , 2008 Based on the current data , to produce 4 automobiles instead of 2 , the economy will have to forgo 6 forklifts , while the production of 8 automobile will require sacrificing 9 forklifts . If the economy characterized by...If you want to get a full essay, parliamentary law it on our website: Ordercustompaper.com

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