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Wine Figure 2-1 .... Bread D Refer to Figure 2-1: Along the Possibilites Production Frontier, The most efficient point of Production depicted is Point B Point C Point D B, C, D are equally efficient

Wine Figure 2-1 .... Bread D Refer to Figure 2-1: Along the Possibilites Production Frontier, The most efficient point of Production depicted is Point B Point C Point D B, C, D are equally efficient

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Understanding the Production Possibilities Frontier (PPF) Diagram** **Figure 2-1: Production Possibilities Frontier** *Explanation of the Graph:* - The x-axis of the graph represents the quantity of Bread produced. - The y-axis represents the quantity of Wine produced. - The curve shown in the graph is called the Production Possibilities Frontier (PPF). This represents the maximum possible production combinations of two goods – in this case, Wine and Bread – that can be produced with available resources and technology. *Key Points on the PPF:* - **Point A, B, and C** represent production combinations that utilize resources fully and efficiently. These points lie on the PPF curve. - **Point D** is also on the PPF curve, signifying another efficient production point. - **Point E and F** are inside the PPF curve and thus represent an inefficient use of resources—they are achievable but do not use resources to their full potential. - **Point G** is outside the PPF curve, representing an unattainable production point with the current resources and technology. **Assessment Question:** Refer to Figure 2-1: Along the Possibilities Production Frontier, the most efficient point of production depicted is: - ⭕ Point B - ⭕ Point C - ⭕ Point D - ⭕ B, C, D are equally efficient *Explanation:* Points B, C, and D are all along the curve of the PPF, indicating that at these production combinations, resources are used to their fullest capacity. Therefore, these points are equally efficient. Point E and F represent inefficient production points where resources are not fully utilized. Point G is not achievable under the current conditions. Thus, the correct answer to the assessment question is: - ⭕ **B, C, D are equally efficient**
Transcribed Image Text:**Understanding the Production Possibilities Frontier (PPF) Diagram** **Figure 2-1: Production Possibilities Frontier** *Explanation of the Graph:* - The x-axis of the graph represents the quantity of Bread produced. - The y-axis represents the quantity of Wine produced. - The curve shown in the graph is called the Production Possibilities Frontier (PPF). This represents the maximum possible production combinations of two goods – in this case, Wine and Bread – that can be produced with available resources and technology. *Key Points on the PPF:* - **Point A, B, and C** represent production combinations that utilize resources fully and efficiently. These points lie on the PPF curve. - **Point D** is also on the PPF curve, signifying another efficient production point. - **Point E and F** are inside the PPF curve and thus represent an inefficient use of resources—they are achievable but do not use resources to their full potential. - **Point G** is outside the PPF curve, representing an unattainable production point with the current resources and technology. **Assessment Question:** Refer to Figure 2-1: Along the Possibilities Production Frontier, the most efficient point of production depicted is: - ⭕ Point B - ⭕ Point C - ⭕ Point D - ⭕ B, C, D are equally efficient *Explanation:* Points B, C, and D are all along the curve of the PPF, indicating that at these production combinations, resources are used to their fullest capacity. Therefore, these points are equally efficient. Point E and F represent inefficient production points where resources are not fully utilized. Point G is not achievable under the current conditions. Thus, the correct answer to the assessment question is: - ⭕ **B, C, D are equally efficient**
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