The basis for trade is comparative advantage 2. possibilities curve (the shaded area) and points outside the production possibilities curve. The production possibilities curve tells us A. the specific combination of two products that is most desired by society. The production possibilities curve tells us the combination of products to maximizes the number of outputs made. Specialization is based on comparative, not absolute, advantage 4. There are winners and losers within trading states countries 5. Important arguments against free trade exist 6. The basis for trade is comparative advantage 3. The following diagram (21.2) illustrates the production possibilities set out in the above table. If the firm wishes to increase snowboard production, it will first use Plant 3, which has a comparative advantage in snowboards. The production possibility curve tells us about the basic fact of human life that the resources available to mankind in terms of factors, goods, money or time are scarce in relation to wants, and the solution lies in economizing these resources. C. that costs are irrelevant in a society that has fixed resources. B. that costs do not change as society varies its output. Definition: The Production Possibilities Curve, also known as the production possibilities frontier, is a graph that shows the maximum number of possible units a company can produce if it only produces two products using all of its resources efficiently. It illustrates the options an economy has when producing two products. The basis for trade is comparative advantage 3. D. the combinations of two goods that can be produced with society’s available resources. At point A, Alpine Sports produces 350 pairs of skis per month and no snowboards. The curve is normally bowed-outward to show that opportunity costs increase. The production possibilities curve tells us how much we can produce from existing resources and technology 2. Not yet answered Points out of 100 Com i FH is the which tells us how much of good B must be exchanged on market to obtain an additional good A Select one: a. production possibility curve; domestic ob.consumption possibilities curve; world O c. consumption possibilities curve, domestic od production possibility curves world The winners from trade can more than compensate the losers 6. The production possibilities model does not tell us where on the curve a particular economy will operate. If a production point lies inside or on the curve—like point C, at which Tom catches 20 fish and gathers 9 coconuts—it is feasible. Question 19 Question Refer to the following graph. The curve shown combines the production possibilities curves for each plant. In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which … Instead, it lays out the possibilities facing the economy. The production possibilities curve tells us how much we can produce from existing resources and technology 2. The production possibilities curve tells us how much we can produce from existing resources and technology 1. There are winners and lowers in trading states and countries 4. Specialization is based on comparative, not absolute, advantage 3. A production possibilities curve shows how well an economy is using available resources and technology during production. There are winners and losers within trading states and counties 5. The winners from trade can more than compensate the losers 5. 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