Title: The production possibilities boundary shows possible combinations of guns and butter that can be ... Post by: wilcoxj49 on Oct 9, 2022 The production possibilities boundary shows possible combinations of guns and butter that can be produced by a country. The lower diagram shows demand and supply for butter. ▸ the increase in the price of butter (relative to the price of guns) will cause the demand curve to shift back down to D and allocative efficiency will be maintained. ▸ the price of guns (relative to the price of butter) rises and the economy moves to point (a) on the PPB. ▸ the supply curve will shift up to S1 and allocative efficiency will be maintained. ▸ the marginal value to consumers of butter is less than the marginal cost to producers; the price of butter (relative to the price of guns) rises; the economy moves to output Q2 of butter and point (c) on the PPB. ▸ the marginal value to consumers of butter is greater than the marginal cost to producers; the price of butter (relative to the price of guns) rises; the economy moves to output Q2 of butter and point (c) on the PPB. Title: The production possibilities boundary shows possible combinations of guns and butter that can be ... Post by: dioxy186 on Oct 9, 2022 Content hidden
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