Why is it that some Production Possibilities curve graphs can appear to be within a straight procession, not curved?
Is it because it's directly proportional?
what's the reason?
Answers:
In economics, a production-possibility frontier (PF) or “transformation curve” is a graph that shows the different rates of production of two goods that an discount (or agent) could efficiently produce with set productive resources. Points along the curve describe the trade-off between the two goods, that is, the opportunity cost. Opportunity cost here measures how much an secondary unit of one good costs within units forgone of the other good. The curve illustrate that increasing production of one good reduces maximum production of the other worthy as resources are transferred away from the other good.
When the cost is increase there is no same effect contained by the production. Production may not increase with the every increase in cost. In such a situation production possibility cure will be a straight row. For example, when the wages are increases the productivity of labor will increase to certain extent. But, in the wages go on increasing productivity of labor may not increase with the every increase in wages. Productivity of a labor will become stagnate after a unshakable level.
http://en.wikipedia.org/wiki/Production_…
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what's the reason?
Answers:
In economics, a production-possibility frontier (PF) or “transformation curve” is a graph that shows the different rates of production of two goods that an discount (or agent) could efficiently produce with set productive resources. Points along the curve describe the trade-off between the two goods, that is, the opportunity cost. Opportunity cost here measures how much an secondary unit of one good costs within units forgone of the other good. The curve illustrate that increasing production of one good reduces maximum production of the other worthy as resources are transferred away from the other good.
When the cost is increase there is no same effect contained by the production. Production may not increase with the every increase in cost. In such a situation production possibility cure will be a straight row. For example, when the wages are increases the productivity of labor will increase to certain extent. But, in the wages go on increasing productivity of labor may not increase with the every increase in wages. Productivity of a labor will become stagnate after a unshakable level.
http://en.wikipedia.org/wiki/Production_…
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