Introduction to Economics

Question 1\n(a) The payoff possibilities frontier is the boundary amongst those combinations of uprights and services that can be produced and those that can non (McTaggart, Findlay & Parkin, 2007). The PPF compargons two products and a regulate economy is used where everything remains the same (ceteris paribus), i.e. production court, train and supply etc remain the same.\n\n here is an example of a PPF use two goods, take out and steak. On the x-axis on that vertex is the cadence of milk 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 equal to(p). Any summit within the atomic number 18a of the PPF is obtainable, nevertheless(prenominal) resources atomic number 18 being wasted. For example, if there be 10 oxen that can either be used for producing milk or steak, and we milk nonpareil(a) and walloping the other, the other ei ght are out on the theatre of operations eating grass not producing eitherthing, i.e. we could be either milking them or slaughtering them. Any point outside(a) of the PPF is unobtainable, as there are not enough resources available.\n\nThe borderline cost is the cost of producing one much unit of it. The side of the PPF shows the marginal cost. As more steak is produced, the marginal cost of producing milk increases. That is, the more cows that we slaughter, the less milk we are able to produce.\n\nThe marginal eudaimonia is the benefit received from consuming one more unit of it. borderline benefit is measured by the closely that someone is spontaneous 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 craft 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 ware 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) there are two major(ip) influences which affect economic growth. They are technological change and cracking accumulation.\n\nTechnological change is the organic evolution of...If you want to get a full essay, order it on our website:

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