The following graph depicts a Production Possibilities Curve for an economy that can only produce apples...

   

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The following graph depicts a Production Possibilities Curve for an economy that can only produce apples or oranges. If the economy's resources are all devoted to producing apples, then 8 million apples would be produced. If the economy's resources are all devoted to producing oranges, then 8 million oranges would be produced. APPLES in co 7.5 6 3.5 8 0 2 6 ORANGES P1 A. Why do we typically draw production possibilities curves with a negative slope? P1 B. Why do we typically draw production possibilities curves with a "concave" shape? P1 C. Why do we typically assume that the opportunity cost of producing one more unit of any given good increases as production of that good increases? P1 D. For the production possibilities curve graphed above, if the economy is efficient (producing a combination exactly on the PPC border), what would be the total opportunity cost of increasing production of oranges from 2 million to 4 million, in terms of apples? What is the opportunity cost, per each extra orange produced? P1 E. For the production possibilities curve graphed above, if the economy is efficient (producing a combination exactly on the PPC border), what would be the total opportunity cost of increasing production of apples from 3.5 million to 6 million, in terms of oranges? What is the opportunity cost, per each extra apple produced? The following graph depicts a Production Possibilities Curve for an economy that can only produce apples or oranges. If the economy's resources are all devoted to producing apples, then 8 million apples would be produced. If the economy's resources are all devoted to producing oranges, then 8 million oranges would be produced. APPLES in co 7.5 6 3.5 8 0 2 6 ORANGES P1 A. Why do we typically draw production possibilities curves with a negative slope? P1 B. Why do we typically draw production possibilities curves with a "concave" shape? P1 C. Why do we typically assume that the opportunity cost of producing one more unit of any given good increases as production of that good increases? P1 D. For the production possibilities curve graphed above, if the economy is efficient (producing a combination exactly on the PPC border), what would be the total opportunity cost of increasing production of oranges from 2 million to 4 million, in terms of apples? What is the opportunity cost, per each extra orange produced? P1 E. For the production possibilities curve graphed above, if the economy is efficient (producing a combination exactly on the PPC border), what would be the total opportunity cost of increasing production of apples from 3.5 million to 6 million, in terms of oranges? What is the opportunity cost, per each extra apple produced?

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P1 A Production possibilities curves are typically drawn with a negative slope because they represent the concept of opportunity cost ... View the full answer