What are the implications of this idea for the shape of the production possibilities frontier?

What are the implications of this idea for the shape of the production possibilities frontier?

What are the implications of this idea for the shape of the production possibilities​ frontier? Increasing the production of a good requires larger and larger decreases in the production of another good. The production possibilities frontier will be bowed outward.

What is specialization how does it affect supply?

Specialization means that in our global economy we have many different companies making specific parts that are then acquired by other companies to assemble their products, like cell phones. Specialization leads to a much more efficient supply chain and opens up greater production possibilities.

What happens to a country that produces a combination of goods that uses all the resources available in the economy?

Question: What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? The country has eliminated scarcity.

How does specialization allow a country to achieve consumption beyond its production possibilities curve?

Adam Smith said that countries should specialize in the goods and services in which they have an absolute advantage. When countries specialize and trade, they can move beyond their production possibilities frontiers, and are thus able to consume more goods as a result.

How can a country gain from specialization and trade?

How can a country gain from specialization and trade? A country can specialize in producing that for which it has a comparative advantage and then trade for other needed goods and services. the substitution of domestic steel for foreign steel absorbs resources that would otherwise produce goods of great value.

Why is specialization important to a country’s economy?

Specialization can increase the productivity of and provide a comparative advantage for a firm or economy. Microeconomic specialization involves the individual actors and economic components, and macroeconomic specialization involves the broad advantage an economy holds in production.

How does specialization and trade increase total wealth?

We both have an incentive to specialize and trade. Trade increases total wealth by allowing a person to specialize in those products that he or she produces at a lower opportunity cost than others and trade for those goods that others produce at lower opportunity cost.

How is specialization limited by costs of exchange?

Specialization Limited by Costs of Exchange Even though money eliminates the costs directly associated with barter there still remain some costs of exchange that reduce the benefits of specialization. These costs of exchange are commonly referred to as transactions costsand include:

Which is the best description of specialization in economics?

Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency. Economics is a branch of social science focused on the production, distribution and consumption of goods and services.

How does specialization increase the output of a company?

Total output is increased when one worker specializes in one type of activity and trades with other specialized workers, said Smith. He pointed out that specialization could occur at the individual level, along different firms or even countries. 1  Economic actors that specialize in a task become more proficient at it.