2. b. the production possibilities curve
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2. b. the production possibilities curve

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2. b. the production possibilities curve Document Transcript

  • 1. The Production Possibilities Curve (PPC) 1. Use the following Production Possibility Schedule for a hypothetical economy that produces only two goods – skateboards and bicycles. Production Scenario Skateboards Bicycles Opportunity Cost A 40 0 B 38 1 C 32 2 D 20 3 E 0 4 __________________________________________ 2. Fill in the Opportunity Cost column on the table above. 3. Can the economy produce 38 skateboards and 2 bicycles? Why or why not? _________________________________________________________________________________________________ _________________________________________________________________________________________________
  • 2. 4. If 32 skateboards and one bicycle were to be produced how would you describe the economy? _________________________________________________________________________________________________ _________________________________________________________________________________________________ 5. Indicate Point F on the graph as a point of inefficient use of resources. 6. Indicate Point G on your graph as a point currently unattainable. What would be required to make this point attainable? _________________________________________________________________________________________________ _________________________________________________________________________________________________