Macro 3.4 Essay Example | Topics and Well Written Essays - 1250 words

Macro 3.4 - Essay ExampleThe horizontal faecal matter represents all the resources that were used to induce up with automobile while vertical movement represent all resources that were used to come with the branchinglifts. Additionally, the graphical record represents a trade off that may exist when resources are shifted to either automobile or fork lifts. This is usually done when resources are fully employed given the fact that engineering science and institutions remain continual (Tucker, 2011). Given all the above conditions, out potential for the two products may be able to be achieved at any range on the toot (Tucker, 2011). The law of increasing opportunity coast states that, when technology and resources are held constant, opportunity cost increases as the labor of one out increases (Tucker, 2011). In this case, the production orifice curve above exhibit the law of increasing opportunity cost because production possibility curve above displays a convex shape (Tucker , 2011). ... Therefore, based on the above assessment it can be scrutinized that the production possibility curve above exhibit the law of increasing opportunity cost (Tucker, 2011). b) If the providence is at head C, what is the opportunity cost of 10 more automobiles? (5 points) If the hypothetical economy is at point C, the economy must sacrifice 20 units of automobile in format to issue 45 supererogatory units of forklifts this is because movement along the vertical axis led to an increase in number of automobile units universe sacrificed in order to produce spare units of fork lifts. On the other hand, a downward movement below point C along the vertical axis leads to an increase in number of additional units of automobile being produced as more and more units of forklifts are being sacrificed(Tucker, 2011). C) If the economy is characterized by this production possibilities curve and is producing 10 automobiles and 40 forklifts, what can you conclude about its use of it s available resources? (5 points) When this economy produces 10 automobiles and 40 forklifts, it is an indication that, the hypothetical economy must sacrifice 10 units of automobile in order to produce 10 units of folk lifts. On the other hand, the economy must sacrifice 40 units of forklifts to produce 10 units of automobile. At this point of production we can say that economy is its attainable and in effect(p) because the resources are fully employed while technology is held constant (Tucker, 2011). d) Is production at a point outside of the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve? Could international trade allow a country to consume beyond its current production possibilities