Consider the following production possibilities frontier model for an economy that produces only two goods: wheat and tablets. 0 20 40 60 80 100 100 80 60 40 20 0 TABLETS (Millions) WHEAT (Millions of bushels) PPF Which of the following is true regarding this economic model? In order to construct such a model, an economist would need real life data regarding countries that produce only two goods. The fact that there are only two goods produced in this theoretical economy, when, in reality, economies produce many more types of goods, means this model is generally useless. The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts. This PPF is not an economic model.

Question

01-05-2020
Business

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Consider the following production possibilities frontier model for an economy that produces only two goods: wheat and tablets. 0 20 40 60 80 100 100 80 60 40 20 0 TABLETS (Millions) WHEAT (Millions of bushels) PPF Which of the following is true regarding this economic model? In order to construct such a model, an economist would need real life data regarding countries that produce only two goods. The fact that there are only two goods produced in this theoretical economy, when, in reality, economies produce many more types of goods, means this model is generally useless. The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts. This PPF is not an economic model.

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Shariqahmed Shariqahmed · Answer 1 · 2020-05-02T04:05:17+02:00

Answer:

The Correct answer is "The circumstance that there are solely 2 product made during this hypothetical economy may be a simplifying supposition that also permits economists to validate key financial ideas"

Explanation:

The production chance may be outlined as a line that is synopsis of various combos of 2 diverse product which may be made with the accessible assets by victimization it with efficiency. If the expertise expands or incomes rise, then the PPF moves outward. While, PPF undertakes that within the nation there are solely two product made however in real world in the country over 2 properties are shaped but it still supports to validate significant financial ideas.