Answer

A production possibility frontier (PPF) may be a curve that shows all of the possible
levels of production for 2 goods, given the entire amount of resources available within
the economy. The PPF may be a downward sloping curve thanks to limitations on
resources; for instance, the upper the assembly of 1 good, the lower the assembly of
the opposite good.

A) The production possibility curve shows different combinations of products and

services which will be produced during a fully employed economy, assuming the
available supplies of resources and technology are fixed.

Automobile Forklift

0 30

2 27

4 21

6 12

8 0
Assumption of production possibility frontier are as follows :

⚫ Technology is fixed.

⚫ Resources don't change

⚫ Resources are utilized at full effectiveness

⚫ Two merchandise are delivered in an economy.

b) At point C, 4 units of automobiles and 21 units of forklifts are being produced. to

supply another unit of the automobile, the producer should produce 17 units of the
forklift. to supply another unit of forklift, the producer should produce 3.9 units of
cars, and as cars can't be produced in decimals. As PPC is concave shaped, increasing
another unit of 1 goodwill reduce the unit of other good. As we produce more of 1
good, the cost of other good rises. The law of accelerating costs means because the
production of excellent increases, the chance cost of manufacturing a further unit
rises. this suggests that so as to supply more of some good, more of the opposite
good had to be sacrificed.

c) The point (3,20) is under the PPC curve, so you'll say that at this level of production,
resources aren't fully utilized. So, resources are available if they want to boost
production. If the economy is producing 3 automobiles and 20 forklifts, then this is
able imply that the economy isn't utilizing its resources efficiently.

d) No, production outside PPC isn't feasible as resources aren't available for that level.
If there's technological advancement in the future which makes goods to be produced
with fewer resources available, then it might be feasible. If a rustic consumes quite
their production level, they will only consume at that level if they're importing
resources from abroad . The point outside the PPC shows the unachievable
combination of the products and so as to succeed in that time, the firm should either
improve the technology or should increase the resources.