Friday, January 16, 2015

Possibility Curve



Attainable-  it is retrievable to produce trucks and boats



















Point B- in the middle, always efficient . producing equal trucks and cars

Point A- efficient but producing more boats

Point C- efficient but producing more trucks

Point D- attainable inside curve but inefficient. under utilizing resources
1) decrease in the population 
2) under employment of unemployment
3)war, famine

Point E- Unattainable 
1) technology improvement
2) economic growth
3) discovering new resources

Key Assumptions
1. two goods are produced
2. full employment
3. fixed resources (land, labor, capital)
4. fixed state of technology
5. no international trade






2 comments:

  1. I'm kinda confuse about this graph, because of the dotted line(it got me confusing). it would be better if you find a graph without a dotted line. :)

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  2. The information in your blog is very detailed and helpful. Your detailing of the points on the graph are very clear and easy to understand. Overall, i think the blog could use a little bit more information about supply and demand, but the information that is given is very useful and clear. Thanks for your blog!

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