Question

as you read section 3, complete the chart by indicating where on a production possiblities curve the following information is shown. Reading a production possibilities curve 1. Categories or specific goods or services to be compared ________________

Answer 1

A production possibilities curve is typically drawn as a curve rather than a straight line because it represents the concept of opportunity cost and scarcity, and the trade-offs between producing two different goods or services in an economy with limited resources and technology.

Step-by-step explanation:

A production possibilities curve is typically drawn as a curve rather than a straight line because it represents the concept of opportunity cost and scarcity. The curve shows the trade-offs between producing two different goods or services in an economy, given limited resources and technology. The bowed-out shape of the curve indicates the concept of increasing opportunity costs, where more of one good can only be produced by giving up increasing amounts of the other.

For example, if an economy is producing at point A on the curve, it can produce more of one good (e.g., skis) by sacrificing some production of the other good (e.g., snowboards). However, as the economy moves along the curve towards point B, the opportunity cost of producing more skis increases, as more and more snowboard production must be given up.

Therefore, the curve's curve shape reflects the concept of limited resources and the necessity of making trade-offs in production decisions.