If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing.
She could alternatively use that hour of time to type a legal brief in her office. PODCASTS, VIDEOS & TOOLS
Question: Economics typically depict the PPF as a bowed-out curve rather than as a straight line in order to show that: a. the opportunity cost of producing a good rises as more is produced.
For this reason, the frontier is usually drawn as a curved line that is concave to the origin. Opportunity cost is measured in the number of units of the second good forgone for one or more units of the first good.
If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing.
In other words, the opportunity cost of producing 2 widgets is now 4 gadgets.Finally, increasing by another 2, Econ Isle can produce 0 gadgets and 6 widgets. One good can only be produced by diverting resources from other goods, and so by producing less of them.
PPFs are normally drawn as bulging upwards or outwards from the origin ("concave" when viewed from the origin), but they can be represented as bulging downward (inwards) or linear (straight), depending on a number of assumptions. FROM THE PRESIDENT
A production possibilities frontier that is a straight line is the result of: constant opportunity costs. In reality, however, opportunity cost doesn't remain constant. Points along the curve describe the tradeoff between the goods. COMMUNITY DEVELOPMENT b. increasing opportunity costs. It shows that opportunity cost varies along the frontier.Let's increase widget production in increments of 2 again until only widgets and no gadgets are produced.
What is the opportunity cost of her typing the legal brief? A lawyer can argue a case in court for one hour and make $300. When the frontier line itself moves, economic growth is under way.
This point shows widget production increased by 2, and this by 2 more, and this by 2 more, indicating all widgets and no gadgets.So along the straight line, each time Econ Isle increases widget production by 2, it loses the opportunity to produce 4 gadgets. But this time we'll consider opportunity cost that varies along the frontier.This point remains the same. As the law says, as you increase the production of one good, the opportunity cost to produce the additional good increases.If Econ Isle transitions from widget production to gadget production, it must give up an increasing number of widgets to produce the same number of gadgets. A straight line PPF illustrates constant opportunity costs. But, opportunity cost usually will vary depending on the start and end points. Points within the frontier indicate resources that are underemployed. ... -A bow-shaped PPF illustrates the concept of increasing opportunity cost. This straight frontier line indicates a constant opportunity cost. ECONOMIC EDUCATION This tradeoff is usually considered for an economy, but also applies to each individual, household, and economic organization.
In the transition to widget production, workers would likely need training and time to develop the skills required to be as productive at making widgets as making gadgets.
At this point, if Econ Isle produces 6 gadgets, it can produce only 4 widgets, so it loses the opportunity to produce 4 gadgets.
Any time you move from one point to another on the line, opportunity cost is revealed—that is, what you must give up to gain something else. A production possibilities frontier that is a straight line shows a a truer from ECON 201 at Miami University
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