00:01
Pps is given and on the basis of this we have to answer the following questions.
00:07
So at part 1 they ask about the opportunity cost to the opportunity cost of producing additional 100 trucks can be determined by examining the slope of the pps at point d.
00:20
So the slope what is the represent it represent the slope represents the rate at which one good exchange with other one good exchange with other.
00:40
So if the slope is steep, if slope we can say steep so it represent higher opportunity cost while a flatter slope suggest a lower opportunity cost.
01:01
So this is for part 1, part 2 if the economy is producing 180 tons of wheat and 200 trucks, it implies that the economy not producing not producing as much as it could so the economy could potentially produce more of both goods or reallocate resources more of both goods produce or reallocate resources to achieve more efficient production level.
01:49
The third one that the bowl out of shape of ppf demonstrate the concept of increasing opportunity cost what it shows concept of increasing opportunity cost as an economy specialized in the production of one good economy specialized production of one good.
02:15
It must sacrifice the production of other must sacrifice production of other good.
02:28
So this trade -off become more significant as the economy moves toward producing one more particular good result resulting in increasing opportunity cost.
02:38
Now, let's talk about the next part of this question, which is the fourth one...