She added a second plant in a nearby town. Ski sales grew, and she also saw demand for snowboards rising-particularly after snowboard competition events were included in the 2002 Winter Olympics in Salt Lake City. Christie Ryder began the business 15 years ago with a single ski production facility near Killington ski resort in central Vermont. To construct a production possibilities curve, we will begin with the case of a hypothetical firm, Alpine Sports, Inc., a specialized sports equipment manufacturer. In drawing the production possibilities curve, we shall assume that the economy can produce only two goods and that the quantities of factors of production and the technology available to the economy are fixed.Ĭonstructing a Production Possibilities Curve It illustrates the production possibilities model. is a graphical representation of the alternative combinations of goods and services an economy can produce. A production possibilities curve A graphical representation of the alternative combinations of goods and services an economy can produce. Understand specialization and its relationship to the production possibilities model and comparative advantage.Īn economy’s factors of production are scarce they cannot produce an unlimited quantity of goods and services.Use the production possibilities model to distinguish between full employment and situations of idle factors of production and between efficient and inefficient production.Explain the concept of the production possibilities curve and understand the implications of its downward slope and bowed-out shape.zip file containing this book to use offline, simply click here. You can browse or download additional books there. More information is available on this project's attribution page.įor more information on the source of this book, or why it is available for free, please see the project's home page. Additionally, per the publisher's request, their name has been removed in some passages. However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. Normally, the author and publisher would be credited here. This content was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz in an effort to preserve the availability of this book. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms. This book is licensed under a Creative Commons by-nc-sa 3.0 license.
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