Production Possibilities Curve; Rational Decision Making; and Specialization

1. If you owned a business, what would a production possibilities curve tell you? Be specific. What are two factors that could cause your production possibilities curve to shift outward?

-The possibilities curve is a graphical representation of the alternative combinations of goods and services an economy can produce. It illustrates the production possibilities model. It shows you how much of two products you can produce with your resources. Two factors that would cause your production possibilities curve to shift outward is when there is an improvement in technology that would benefit both types of goods. An increase in the workforce which would result in mor factor resources being exploited. An improvment in productivity and effeciency in goods production.

2. What is the best way to determine whether or not we are making a rational economic decision?

-If your marginal benefit equal or exceed the marginal cost. Ex. If you buy a shirt it should have good quality, and it should be worth the amount of money you spent on it.

3. Why do companies choose to specialize and trade? What would happen if companies did not choose to specialize?

-Companies choose to specialize and trade because there is more money in trade. It also helps them save. (more bang for your buck)

-If companies choose not to specialize then the company will not do as good as their competitors. It is also a possibility that they may go bankrupt.

4. Include to relevant visuals (based on standards)

5. How do you feel about your knowledge of this standard? What are two questions that you have about this standard?

-I feel as if the standard becomes easy after you begin to study it enough. Everyday I learn something new.

- When there is excessive unemployment, What is the effect on production possibilities curve? Why does a production possibilities curve have a bowed out shape?