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when the economy operates on a point inside the production possibility frontier, the opportunity cost of increasing the production of any goods is zero - true or false

2007-04-24 05:55:48 · 7 answers · asked by Anonymous in Social Science Economics

7 answers

Ok, going back to my original TRUE response..here's why.

If the economy operates inside the PPF, the economy's allocation of resources to produce goods is inadequate or underutilized.

If considering the production of 2 products/goods, then you can create both at an opportunity cost of zero until you reach a point on the PPF curve. Producing alternative goods on the PPF curve have increasing opportunity costs, but not inside the curve.

So True.

2007-04-24 06:01:23 · answer #1 · answered by RUNINTLKT 5 · 1 1

Okay, the Production Possibility Frontier is the curve for goods X and Y, where if Y is at maximum possible production, X will be at zero (and vice versa). To increase Y at this point is impossible, and to increase X, you have to DEcrease the production of Y. This decrease in production of Y is the "Opportunity Cost" of increasing X.

So....

If the economy is operating at a point INSIDE that curve, you do not have to sacrifice any production of one product to get more of another.

Which means: TRUE

2007-04-24 06:19:52 · answer #2 · answered by open4one 7 · 1 0

False. The opportunity to increase production always exists.

2007-04-24 05:59:50 · answer #3 · answered by pointwithinacircle 5 · 0 2

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2016-10-13 09:14:06 · answer #4 · answered by morabito 3 · 0 0

False, Because when you say the economy you cannot be all inclusive. Also when you say any, you are too inclusive. There is always something that is needed more then is produced.

2007-04-24 06:00:23 · answer #5 · answered by Anonymous · 0 2

I should know, because I took economics... but I can't tell you, because I failed that course. It wasn't my fault, the class was at 8am, and it's hard to learn anything at that ungodly hour, through one bloodshot eye. Sorry, bud.

Thumbs WAY UP!!!!!

2007-04-24 06:00:52 · answer #6 · answered by Anonymous · 0 2

haha yur a freshman rite? we r learning that 2 the only problem is i dont pay any attention but i think its false

2007-04-24 06:00:44 · answer #7 · answered by Anonymous · 0 3

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