Question

Suppose the country of montgomery has specialized in the production of a good but has not yet entered into trade. At this point in time, montgomery has?

Answer 1

Suppose the country of montgomery has specialized in the production of a good but has not yet entered into trade. At this point in time, montgomery has moved along its existing production possibilities curve.

A production posibilities curve in economics measures the maximum output of goods and the use of a fixed quantity of input. The input is any aggregate of the four elements of manufacturing: natural resources (which include land), hard work, capital goods, and entrepreneurship.

for example, say an economic system produces 20,000 oranges and 12000 apples. On the chart, it truly is point B. If it desires to produce greater oranges, it ought to produce fewer apples. In the chart, factor C suggests that if it produces 45,000 oranges, it could most effectively produce 85,000 apples.

By means of describing this trade-off, the curve demonstrates the idea of possible price. Making greater than 1 precise will price society the opportunity of making greater of the other excellent.

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