Introduction to Economics

Question 1\n(a) The action possibilities frontier is the boundary between those combinations of goods and services that can be produced and those that cannot (McTaggart, Findlay & Parkin, 2007). The PPF comp ars two products and a feign economy is used where everything clay the same (ceteris paribus), i.e. production bell, gather up and supply etc remain the same.\n\nhither is an example of a PPF utilise two goods, draw and steak. On the x-axis in that location is the add of take out which can be produced in litres and on the y-axis there is the amount of steak which can be produced in kilograms.\n\nEach position on the PPF is efficient. It uses all the resources avail able. Any manoeuver within the bea of the PPF is obtainable, precisely resources ar being wasted. For example, if there argon 10 cows that can either be used for producing milk or steak, and we milk i and shambles the other, the other eight are out on the study eating grass not producing eachthing, i.e. we could be either milking them or slaughtering them. Any suggest extracurricular of the PPF is unobtainable, as there are not enough resources available.\n\nThe borderline cost is the cost of producing iodine to a greater extent unit of it. The gradient of the PPF shows the peripheral cost. As more steak is produced, the marginal cost of producing milk increases. That is, the more cows that we slaughter, the little milk we are able to produce.\n\nThe marginal gain is the benefit received from consuming one more unit of it. borderline benefit is measured by the or so that someone is ordain to pay for another unit.\n\nAs all points on the PPF are efficient, which one point on the PPF is more important than any other? It is the point where the resources are allocated efficiency, that is, we are not art off another good that we value higher than the other. This point is found when the marginal cost is equal to the marginal benefit.\n\nAs we can see, the point of math ematical product of the marginal benefit and marginal cost shows us the most efficient amount to produce, in this case, 5 units of steak and 20 units of milk.\n\n(b) in that respect are two study influences which affect economic growth. They are technological change and capital accumulation.\n\nTechnological change is the victimization of...If you want to get a full essay, order it on our website:

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