Which point represents an inefficient use of resources?
Point X represents an inefficient use of resources, while point Y represents a goal that the economy simply cannot attain with its present levels of resources. As we can see, in order for this economy to produce more wine, it must give up some of the resources it is currently using to produce cotton (point A).
What factor makes an economy inefficient?
A lack of equal information causes economic imbalances that result in adverse selection and moral hazards. All of these economic weaknesses have the potential to lead to market failure. A market failure is any scenario where an individual or firm’s pursuit of pure self interest leads to inefficient results.
Why is PPC concave 11?
PPC is concave to the origin because of increasing Marginal opportunity cost. This is because inorder to increase the production of one good by 1 unit more and more units of the other good have to be sacriced since the resources are limited and are not equally efficient in the production of both the goods.
Is PPF always concave?
It must be noted that both these situations (i.e. PPF being a straight line or convex shaped) would not arise, as MRT always increases. So, PPF is always concave shaped.
What is the shape of PPF curve?
The shape of the PPF is typically curved outward, rather than straight. Choices outside the PPF are unattainable and choices inside the PPF are wasteful. Over time, a growing economy will tend to shift the PPF outwards.
What is the full form of PPC?
PPC stands for pay-per-click, a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Essentially, it’s a way of buying visits to your site, rather than attempting to “earn” those visits organically. Search engine advertising is one of the most popular forms of PPC.
Shifts in the production possibilities curve are caused by things that change the output of an economy, including advances in technology, changes in resources, more education or training (that’s what we call human capital) and changes in the labor force.
Production Possibility Curve (PPC) also known as Production Possibility Frontier (PPF) is a graphical representation of all the possibile combinations of two goods that can be produced in an economy given the available resources and technology.
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