A Report On A Curve Essay

750 Words Nov 29th, 2016 3 Pages
A curve which depicts two topmost output possibilities with inputs that are consistent of resources is defined as a production possibility frontier. Assumptions are made in production possibility frontiers that the inputs are being utilized effectively. The availability of resources is governed by the amount of labor, capital, and technological cost. Another name for the production possibility curve is the transformation curve. Production limits are shown in the production possibility frontier allowing an economy to make decisions about the best goods and services they should produce. The PPF establishes the most efficient period of production to utilized resources in the most effective manner. The PPF for both countries would be clothing and soda.
Businesses which concentrate on the production of a limited scope of goods or services offered are examples of a specialization. It is common practice for countries to specialize in goods and services which have their origins in that particular country. Specialization is a concept that is utilized in the system of international trade. An advantage of importing specialized goods is economies of scale, in which the production cost of a good falls, because additional good are produced. Brazil would specialize in clothing because there are more units of clothing sold than soda. The United States would specialize in soda because there are more units of soda consumed than clothing.
An industry that is dependent on considerable amounts…

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