AP Microeconomics 1.6 Supply and Demand
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AP Microeconomics 1.6 Supply and Demand. What will the production possibilities curve for this economy look like?
AP | AP Microeconomics |
AP Microeconomics | Basic Economic Concepts Factor Markets The Nature and Functions of Product Markets |
Language | English Language |
Transcript
in terms of boats is constant for any level of
production What will the production possibilities curve for this economy
Look like all right potential answers right Both in your
boat Boat boat Well we're drawn grafts now underway to
think through this problem So get your crayons people We
start with this thing mr x and mr y and
this vertical line covers boats and this horizontal line covered
cotton need to figure out if the answer is a
curve shaped like this This this or well this So
if we think through the logic of any of these
curves the answer should come to us in well pretty
straightforward fashion A curve either up or down sideways or
backwards is going to give uneven distribution of resource is
think about an extreme curve like this if we reduce
cotton production just a tiny bid like from here to
here then glam o production volumes of road explode The
same happens with any of the other kurt Small moves
of resource is on one side of the equation Have
dramatic changes on production availability of the other constraint Good
but the problem kind of gives us the answer It
says the opportunity cost of oats is constant for any
level of production constant meaning that what should happen is
if we moved back a scotia this way reducing cotton
production As we move our dot thing in toward the
origin then the ability to produce more oats should increase
similarly or constantly Well small moves this way imply small
moves that way So the answer is b linear and 00:01:54.032 --> [endTime] that's How we roll our oats