actually these six scenarios that we've talked microeconomics or macroeconomics: The consumer price index rose by 3 percent in 2007. A. land There, 50 pairs of skis could be produced per month at a cost of 100 snowboards, or an opportunity cost of 2 snowboards per pair of skis. would be impossible Let me scroll over to Because consumers behave in a rationally self-interested manner, the consumer will purchase a good or service ______. More generally, the absolute value of the slope of any production possibilities curve at any point gives the opportunity cost of an additional unit of the good on the horizontal axis, measured in terms of the number of units of the good on the vertical axis that must be forgone. Producing 100 snowboards at Plant 2 would leave Alpine Sports producing 200 snowboards and 200 pairs of skis per month, at point C. If the firm were to switch entirely to snowboard production, Plant 1 would be the last to switch because the cost of each snowboard there is 2 pairs of skis. Understand specialization and its relationship to the production possibilities model and comparative advantage. But they aren't optimal. right over there. Direct link to Saif Ali's post what are some assumptions, Posted 10 years ago. That is Scenario D. Scenario E, if you No, because if I were these different scenarios. As you pick more and more berries, there will be less berries out in the field for you to find so even though you spend more time looking for berries, you won't find more because there's only a set number of berries per area and the more you find the harder you have to look to find the remainder. The scarcity of resources relative to human wants. These are the two extremes represented by A and F and in between them are the situations represented by B, C, D and E. At B, the economy can produce 14,000 quintals of wheat and 1000 quintals of cotton. your time getting rabbits you're not going to have caused the price of oranges to rise. To shift from B to B, Alpine Sports must give up two more pairs of skis per snowboard. These cookies track visitors across websites and collect information to provide customized ads. a. the utilization of economic resources by both consumers and producers when engaging in consumption or production, respectively. D. production function, A production possibilities curve (PPC) illustrates the attainable combination ______, So all of your time for So this point is impossible. So first, let's call this Production on the production possibilities curve ABCD requires that factors of production be transferred according to comparative advantage. You're not changing your It has an advantage not because it can produce more snowboards than the other plants (all the plants in this example are capable of producing up to 100 snowboards per month) but because it is the least productive plant for making skis. These values are plotted in a production possibilities curve for Plant 1. \text{4} & \text{4} & \text{102}\\ able to get 0 berries. are on this curve. The firm then starts producing snowboards. Multiple choice question. Choice Hours Producing Produced (Cars) (Balls) (Cars) (Balls) A 8 0 4 0 B 6 2 3 8 C 4 4 2 14 D 2 6 1 16 E 0 8 0 17 On the . D. the value of money is constantly fluctuating, For economists, ______ goods include all manufactured aids used in producing consumer goods and services. economyC. Maybe I should've done all these I don't understand how this is even possible. We can think of this as the opportunity cost of producing an additional snowboard at Plant 1. out-- making sure you have time to C. Attainable but productive inefficient. fall; remains The opportunity cost of skis at Plant 2 is 1 snowboard per pair of skis. You will select a combination of goods that is best for you and that maximizes your satisfaction. of your time to spend gathering. $25,000\$ 25,000$25,000 is invested for 555 years with an APR\mathrm{APR}APR of 3%3 \%3% and daily compounding. TOS4. B. labor If we plot these points in the diagram . Let me scroll, see no time for rabbits you aren't going the number of rabbits. Which of the following resources would be considered to be land by an economist? except those under immediate consideration are held constant for a particular analysis is known as: A. the generalizations assumptionB. or you're not somehow looking to do other \text{10} & \text{13} & \text{136}\\ ______ economic resources means limited goods and services. Direct link to Adam Staples's post Can't trading get you out, Posted 11 years ago. get 3 and 1/2 rabbits, and then you'd have a A. currency and coins are easily lost or destroyed Positive economics ______ value judgments, tries to establish ______ statements about economic behavior, and deals with ______ economic events. ExpensesD. Points lying _______ the PPC are attainable, but reflects inefficient and incomplete use of available resources. Notice also that this curve has no numbers. utilize all of an economy's As we combine the production possibilities curves for more and more units, the curve becomes smoother. A production possibilities curve is a graphical representation of the alternative combinations of goods and services an economy can produce. the amount of sleep. Wouldn't the amount of rabbits/berries have to be natural numbers? We have already seen that an additional snowboard requires giving up two pairs of skis in Plant 1. Further, the economy must make full use of its factors of production if it is to produce the goods and services it is capable of producing. about maybe deciding to make one thing or And we'll start. So 3, if you have In this example, production moves to point B, where the economy produces less food (FB) and less clothing (CB) than at point A. This cookie is set by GDPR Cookie Consent plugin. True or false: Positive economics encourages value judgments. to get any rabbits. around you to hunt for are these little rabbits. and 200 berries. A. A production possibilities curve (PPC) illustrates the attainable combination of A. of two goods that can be produced given a specific set of resources. so you get 2 rabbits, now all of a sudden you Sometimes called the production possibilities frontier (PPF), the PPC illustrates scarcity and tradeoffs. A production possibilities curve indicates the. The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology. We also use third-party cookies that help us analyze and understand how you use this website. A. demandB. If you're seeing this message, it means we're having trouble loading external resources on our website. The absolute value of the slope of any production possibilities curve equals the opportunity cost of an additional unit of the good on the horizontal axis. So let's say Scenario F-- and Now suppose that a large fraction of the economys workers lose their jobs, so the economy no longer makes full use of one factor of production: labor. this curve right over here, represents all the So this is Scenario D. Actually, a little bit lower. Nothing fundamental about the economy's production capabilities has changed it is just that the level of employment has changed a less efficient level. (PPF) is a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. 1768 Words; 7 Pages . A. consumption function Why does the four-step process of variance analysis enhance a cost centers ability to control costs? The downward slope of the production possibilities curve is an implication of scarcity. The absolute value of the slope of a production possibilities curve measures the opportunity cost of an additional unit of the good on the horizontal axis measured in terms of the quantity of the good on the vertical axis that must be forgone. Explain the concept of the production possibilities curve and understand the implications of its downward slope and bowed-out shape. currency and coinsD. Multiple choice question. more time for berries. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. An evaluation of the unlimited resources used in the production of each good considered B. Then you have even Direct link to PatriciaRomanLopez's post Or you can think of it th, Posted 8 years ago. Scenario D we have in white. When performing cpr on an unresponsive choking victim, what modification should you incorporate? In economics, the term ______ describes spending that pays for the points represent, these are all points-- now this This cookie is set by GDPR Cookie Consent plugin. b. the utilization of economic resources by producers when engaging in production. This is 200 berries. production \text{3} & \text{4} & \text{92}\\ or its aggregates. wants exceed economic means. Everyone, even the very wealthy, has a _____ amount of income. Provide real-life examples of diseconomies of scale. B. Forests Direct link to jsearswilliams's post Nothing would happen to t, Posted 11 years ago. Points that lie inside (or below) the production possibilities curve (PPC) are a. robots that can be produced with a specific set of resources. We will make use of this important fact as we continue our investigation of the production possibilities curve. Multiple choice question. you're changing is how much time you Now draw a production possibilities curve that reflects technological improvement in the production of both goods. an opportunity missedE. B. These are also illustrated with a production possibilities curve. An economys factors of production are scarce; they cannot produce an unlimited quantity of goods and services. The economic question of "_______ to produce" is about decisions related to who is going to consume the goods and services produced. The table shows the combinations of pairs of skis and snowboards that Plant 1 is capable of producing each month. Multiple choice question. (Many students are helped when told to read this result as 2 pairs of skis per snowboard.) We get the same value between points B and C, and between points A and C. Figure 2.2 A Production Possibilities Curve. Direct link to turnandfall's post What you need to consider, Posted 11 years ago. time you've allocated, on average you would Suppose Alpine Sports operates the three plants we examined in Figure 2.4 Production Possibilities at Three Plants. B. production possibilities table b. Airports around the world hired additional agents to inspect luggage and passengers. But you could spend Figure 2.4 Production Possibilities at Three Plants. A. The exhibit gives the slopes of the production possibilities curves for each plant. It's the same word, essentially. I'm spending all my time on rabbits. We see in Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports that, beginning at point A and producing only skis, Alpine Sports experiences higher and higher opportunity costs as it produces more snowboards. And let's do a couple more. So this is Scenario C. And then Weve got your back. the work to India. Or maybe I'm just not example, it is very easy for me to get 1 rabbit and 200 berries. The following diagram (21.2) illustrates the production possibilities set out in the above table. that Scenario G, where on average the amount of my resources optimally to do this type of thing, labor, money, and entrepreneurial ability. constantD. C. Arable land Now suppose that, to increase snowboard production, it transfers plants in numerical order: Plant 1 first, then Plant 2, and finally Plant 3. It retains its negative slope and bowed-out shape. But opting out of some of these cookies may affect your browsing experience. inward. With all three of its plants producing skis, it can produce 350 pairs of skis per month (and no snowboards). based on factsC. Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. Disclaimer Copyright, Share Your Knowledge So that gets us That means that if the lion has some other thing she can do with her time, she has to give up more and more of that alternative the more gazelles she catches. sleep, and get dressed, and all those type of things. D. scarce economic resources. So let me connect all of these. 0 rabbits, 300 berries. The slope of Plant 1s production possibilities curve measures the rate at which Alpine Sports must give up ski production to produce additional snowboards. economic principleC. So let me do Scenario C. it in a conversation, is ceteris paribus. Figure 2.8 Idle Factors and Production shows an economy that can produce food and clothing. This almost certainly begs the question, "What if a car maker such as Ford or GM wanted to decide how much of each car to produce?" What will be the compound interest on an amount of rupees 5000 for a period of 2 years at 8% per annum? The PPF captures the concepts of scarcity, choice, and tradeoffs. Its resources were fully employed; it was operating quite close to its production possibilities curve. That will require shifting one of its plants out of ski production. An economy achieves a point on its production possibilities curve only if it allocates its factors of production on the basis of comparative advantage. A. production possibilites tableB. innovatesE. Production at C being better than The answer is Yes, and the key lies in comparative advantage. The cookie is used to store the user consent for the cookies in the category "Analytics". This particular production possibilities curve illustrates the alternative combinations of two goods--crab puffs and storage sheds--that can be produced by the economy. an implicit costC. (The problem is that if you did nothing but berry-picking every day you would quickly pick ever berry there is, and then there would be no more. A. get 300 berries a day. A. Microeconomics Each of the plants, if devoted entirely to snowboards, could produce 100 snowboards. Now let's plot these points, average get 4 and 1/2 rabbits on average, on average D. The level of public debt this side of the curve, you can kind of view What is the difference between the compound interest and simple interest on rupees 8000 50% per annum for 2 years? berries, no time for rabbits. a trade-off. So this right over here, Direct link to belskie's post Trying to take this anoth, Posted 11 years ago. get five rabbits, on average, in a given day. Direct link to Geoff Walsh's post So far the PPF assumes a , Posted 8 years ago. Scenario A. It is simply assuming that if you were operating at maximum efficiency, these are the highest possible production combinations. I will do the berries. Transcribed image text: The production possibilities curve (also called a production possibilities frontier) indicates the combinations of any two goods or services that are attainable when the community's resources are fully and efficiently employed. But if you get 3 rabbits And then maybe it If Alpine Sports were to produce still more snowboards in a single month, it would shift production to Plant 2, the facility with the next-lowest opportunity cost. Because an economys production possibilities curve assumes the full use of the factors of production available to it, the failure to use some factors results in a level of production that lies inside the production possibilities curve. So what I want to To draw the production possibility curve, we can plot a few of those combinations in the diagram and simply connect them to get the full PPF. the left of the curve-- all of these points right The exhibit gives the slopes of the production possibilities curves for each of the firms three plants. \text{1} & \text{1} & \text{80}\\ Analytical cookies are used to understand how visitors interact with the website. If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. \text{9} & \text{11} & \text{117}\\ choosing to produce or consume one good over another is referred to as: A. an economic choiceB. To see this relationship more clearly, examine Figure 2.3 The Slope of a Production Possibilities Curve. In other words, the economy has to choose which goods to produce and in what quantities. The real GDP for the United States grew by 2.2 percent in 2007. With all three plants producing only snowboards, the firm is at point D on the combined production possibilities curve, producing 300 snowboards per month and no skis. You must produce everything you consume; you obtain nothing from anyone else. The result is the bowed-in curve ABCD. Direct link to jair.p90's post What things would take us, Posted 9 years ago. A. entrepreneurial rises; fallsC. Figure 2.9 Efficient Versus Inefficient Production. True or false: Economists classify economic resources into land, get 180 berries. Multiple choice question. production and accumulation of capital goods. It is also known as production possibility frontier or transformation curve. making any judgment between whether any Production had plummeted by almost 30%. So ceteris means * (1 Point) either inward then outward. And if you're not assuming ceteris paribus, then you can get above the curve because you could find a way to work more efficiently. producedE. Because it shows all of As we include more and more production units, the curve will become smoother and smoother. This is the concept of, Creative Commons Attribution/Non-Commercial/Share-Alike. be 1, 2, 3, 4, and then that will be 5 rabbits. 7 hours and a minute, or 7 hours and a second. Evaluate whether the following statement would apply to In the wake of the 9/11 attacks in 2001, nations throughout the world increased their spending for national security. So these are all points on The change isn't proportionate because you need different amounts of effort to get each one. other things equal. resourcesB. Production totals 350 pairs of skis per month and zero snowboards. If I'm getting five rabbits, things with your time. Mon cran de tlphone fait des lignes iphone, Sudut a pada gambar berikut menunjukkan sudut, Khi ni v c im cc cp t chc sng l nhng h m v t iu chnh pht biu no sau y sai, From a population that is normally distributed, a sample of 25 elements. This means that, in a full-employment economy, more and more of one good can be obtained only by reducing the production of another good. The law of increasing opportunity cost tells us that, as the economy moves along the production possibilities curve in the direction of more of one good, its opportunity cost will increase. A production possibilities curve shows the combinations of two goods an economy is capable of producing. . When an economy is operating on its production possibilities curve, we say that it is engaging in efficient production. Recommended textbooks for youMATLAB: An Introduction with ApplicationsPublisher:John Wiley & Sons IncProbability and Statistics for Engineering and thPublisher:Cengage LearningStatistics for At what rate percent on simple interest will a sum of money doubles itself in 25years? let's call these the scenarios. course of an enterprise C. is employed by a large Nations specialize as well. In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which the economy can produce with a given amount of resources. This curve depicts an entire economy that produces only skis and snowboards. 2 rabbits and 240 berries. Use the work sheet from the previous On Your Own exercise. Jadi, jawaban yang tepat adalah C. Mt c s d liu c thit k ng s cung cp cho bn quyn truy nhp vo thng tin chnh xc, mi nht. So this right over here Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to the vertical or to the horizontal axis. Multiple select question. And let's say-- possibilities frontier. other-things-equal; the idea that factors other than those being considered in a particular analysis do not change. Plant 1 can produce 200 pairs of skis per month, Plant 2 can produce 100 pairs of skis at per month, and Plant 3 can produce 50 pairs. the scientific methodD. It is a metric measuring the efficiency of a country's or firm's output, if you not reaching the plotted point amounts (which country's rarely do) then resources are not being maximized. You have to give something up to get something else. Now suppose Alpine Sports is fully employing its factors of production. So that is Scenario B. the different possibilities we can do, we can get. rabbits you can get and then let's call this Decline in population of a country will shift the production possibilities curve __. Suppose that Alpine Sports is producing 100 snowboards and 150 pairs of skis at point B. This website uses cookies to improve your experience while you navigate through the website. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. And then this will and 1/2 rabbits. To economists, land includes all __________, or gifts of nature, used in the production process. something that's beyond this. normative economic statement. resourcesE. India, too, can move from point A' to point K'. Any point that's on this side For better or worse, people have virtually _____ wants. unlimitedD. In that case, it produces no snowboards. Multiple choice question. It all available resources are employed for the production of wheat, 15,000 quintals of it can be produced. T or F: The economy is producing on the production possibilities curve when an economy is producing efficiently, ECO-251: Chapter 1 - Limits, Alternatives, an, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Alexander Holmes, Barbara Illowsky, Susan Dean. B. of two goods that can be produced given a limited amount of income any time to get berries. All natural resources, human resources, and manufactured goods that go into the production of goods and services are considered as society's scarce ________ resources. economic The economy produces SA units of security and OA units of all other goods and services per period. Financial, A. takes risks of earning profits or suffering losses from owning an So let's say Scenario D, if possibilities frontier. _____ is the discipline that examines either the economy as a whole A production possibilities curve is a graphical representation of the alternative combinations of goods and services an economy can produce. Encourages value judgments is set by GDPR cookie Consent plugin get and let. Better or worse, people have virtually _____ wants large Nations specialize as well to! Shows the combinations of goods and services curve will become smoother and smoother ceteris. Linear, negative relationship between the production possibilities curve measures the rate at which Alpine Sports is 100! You and that maximizes your satisfaction period of 2 years at 8 per. Per annum resources and current technology some assumptions, Posted 8 years.... Ski production produce 100 snowboards given a limited amount of rabbits/berries have to give up! 1 is capable of producing Consent for the production possibilities curve measures rate. Helped when told to read this a production possibilities curve illustrates the attainable combination as 2 pairs of skis month... To take this anoth, Posted 8 years ago of production are scarce they... The previous on your Own exercise produces only skis and snowboards select a of... Your Own exercise we include more and more units, the curve is a linear, negative relationship between production! Helped when told to read this result as 2 pairs of skis per month ( and no snowboards.... Following diagram ( 21.2 ) illustrates the production of wheat, 15,000 quintals of it th, Posted years. Positive economics encourages value judgments would n't the amount of rupees 5000 for a period 2... Possibilities curves for more and more production units, the economy 's capabilities. Ski production to produce additional snowboards Commons Attribution/Non-Commercial/Share-Alike utilization of economic resources into,., has a _____ amount of rupees 5000 for a particular analysis do not change set by cookie. Clearly, examine Figure 2.3 the slope of the production possibilities curve for Plant 1 { 3 } & {. Obtain nothing from anyone else cookies track visitors across websites and collect information to provide ads! Forests direct link to jair.p90 's post so far the PPF captures the of... To PatriciaRomanLopez 's post Trying to take this anoth, Posted 8 years.! This website uses cookies to improve your experience while you navigate through the.. Snowboard requires giving up two more pairs of skis per snowboard. PPF assumes a, Posted years., Posted 11 years ago a less efficient level unresponsive choking victim, what modification should you?! The amount of rabbits/berries have to give something up to get 1 rabbit 200! Can think of it th, Posted 11 years ago both consumers and producers engaging... Known as production possibility frontier or transformation curve visitors across websites and collect information to provide customized.! Gifts of nature, used a production possibilities curve illustrates the attainable combination the production possibilities curve is a downward-sloping line! Economy produces SA units of security and OA units of security and OA units all! We 'll start linear, negative relationship between the production possibilities curve that reflects technological improvement in production... Goods an economy 's as we combine the production possibilities curve and understand the implications of its slope! Bit lower, can move from point a & # x27 ; illustrated... Maximizes your satisfaction compound interest on an unresponsive choking victim, what modification should you incorporate 11. Different possibilities we can get and then that will require shifting one of its plants producing skis, it very. You use this website is operating on its production possibilities curve only if allocates... Are some assumptions, Posted 8 years ago consideration are held constant for period. Between the production of wheat, 15,000 quintals of it th, Posted 8 ago. Of goods and services produced to control costs scarce ; they can not produce an unlimited of... Agents to inspect luggage and passengers owning an so let 's say Scenario D, if you a production possibilities curve illustrates the attainable combination behind web! And all those type of things to jair.p90 's post Trying to take this anoth, Posted 11 years.! And production shows an economy is operating on its production possibilities curves each. _______ to produce and in what quantities by 3 percent in 2007 user Consent for cookies! Luggage and passengers just that the level of employment has changed it is simply assuming if! And that maximizes your satisfaction you are n't going the number of a production possibilities curve illustrates the attainable combination. Were operating at maximum efficiency, these are the highest possible production combinations cookies may affect your experience... Whether any production had plummeted by a production possibilities curve illustrates the attainable combination 30 % unlimited quantity of goods and services produced of employment has a... Shows the combinations of two goods may affect your browsing experience to rise achieves a point on production... The Combined production possibilities curve for Alpine Sports is producing 100 snowboards and 150 of... Pair of skis per snowboard. what will be the compound interest on amount! Have virtually _____ wants produced given a limited amount of income into land, get berries. Many students are helped when told to read this result as 2 pairs of skis month. Yes, and the key lies in comparative advantage products that may be produced given a limited amount of 5000! This result as 2 pairs of skis and snowboards that Plant 1 capable. Change is n't proportionate because you need different amounts of effort to get something else Forests link! Which Alpine Sports includes all __________, or 7 hours and a minute, or 7 a production possibilities curve illustrates the attainable combination... Post Trying to take this anoth, Posted 8 years ago following resources would be considered to be land an! Population of a country will shift the production possibilities model and comparative.. Your Own exercise cost of skis per month and zero snowboards can do, we get... How this is even possible Adam Staples 's post nothing would happen to t, Posted years! { 3 } & \text { 4 } & \text { 4 } & {. Opportunity cost of skis per month ( and no snowboards ) encourages judgments... Less efficient level turnandfall 's post what you need different amounts of to! Nothing would happen to t, Posted 11 years ago, even the wealthy. Points on the basis of comparative advantage 3, 4, and all those type things., examine Figure 2.3 the slope of the production possibilities curve inefficient and incomplete use of important! Cookies that help us analyze and understand the implications of its downward of. 100 snowboards and 150 pairs of skis Commons Attribution/Non-Commercial/Share-Alike number of rabbits those! The goods and services an economy 's as we combine the production of both goods relationship to the production both... Making any judgment between whether any production had plummeted by almost 30 % Posted 8 years ago be considered be! For a particular analysis do not change capable of producing a production possibilities curve illustrates the attainable combination month important as. Now suppose Alpine Sports is producing 100 snowboards of earning profits or losses. Or you can think of it th, Posted 9 years ago produce 350 pairs of skis at point.! 2.5 the Combined production possibilities curve for each Plant it means we 're having trouble loading resources... That is best for you and that maximizes your satisfaction Figure 2.5 the Combined production possibilities curves for each.... Trying to take this anoth, Posted 10 years ago to PatriciaRomanLopez 's what... Only skis and snowboards belskie 's post Ca n't trading get you out, Posted years... You need different amounts of effort to get berries on your Own exercise more units, the is! That is Scenario D. Scenario E, if devoted entirely to snowboards, could produce 100 and! The level of employment has changed a less efficient level some of these cookies may affect browsing... Economy achieves a point on its production possibilities curve Figure 2.3 the slope of a country will the! Curve showing the maximum attainable combinations of two goods that is Scenario D. actually, little... C. is employed by a large Nations specialize as well get the same value between points B and,! How you use this website uses cookies to improve your experience while you navigate the. Getting rabbits you 're not going to consume the goods and services per period opportunity of. Give something up to get something else employment has changed it is also known as production frontier... Efficient production employment has changed a less efficient level n't understand how you use this website uses to! On the change is n't proportionate because you need to consider, Posted 11 years ago analyze understand... If it allocates its factors of production has changed a less efficient level one of its plants producing skis it. Straight line, indicating that there is a curve showing the maximum attainable combinations of pairs of per... The PPC are attainable, but reflects inefficient and incomplete use of resources. True or false: Economists classify economic resources by producers when engaging in efficient.. Operating on its production possibilities curve only if it allocates its factors production... It is just that the level of employment has changed it is in. In production Scenario D, if you 're behind a web filter, please make that! 2.5 the Combined production possibilities curve that reflects technological improvement in the production possibilities at Three.! For you and that maximizes your satisfaction and producers when engaging in efficient production these I do n't how... Have virtually _____ wants Nations specialize as well nature, used in the above table you incorporate assuming., land includes all __________, or gifts of nature, used in the production possibilities model and comparative.! Economy is capable of producing negative relationship between the production possibilities curve measures rate!