The Production Possibility Model

3.The objective of this question is to help you understand and apply the various concepts related to the Production Possibility Model.

The Production Possibilities Model is one of the first Economic Models students learn about.  Please refer to the material covered in the topic called The Economizing Problem.

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•Please explain what the model teaches us.

•Please explain each of the 4 assumptions of the model.

•Please explain Productive Efficiency and how it relates to the ppc.

•Please explain Allocative Efficiency and provide a thorough explanation of the 2-step process for finding the point of allocative efficiency on the PPC.

•On the topic of Economic growth: need to see some detail here.

i. What does it mean?

ii. How can it be graphically represented?

iii. What are the prerequisites to Economic growth?

iv. GDP growth rates for the past 60 years show a steady downward trend. Use what you have learned about Economics to explain why you should care about that.

v. Why is Economic growth good for you and your country?

vi. Why is Economic growth bad for you and your country?

vii. Please provide thorough explanation of 3factors that would tend to limit economic growth. Be sure you explain how those factors would actually cause economic growth to be limited.

•The Presentville –Futureville case:

1.Explain what motivated each group to make the decisions they made.

2.Explain the impact of those decisions on the future of each group.

3.Which group is most like America, and why?

4.What does this storyteach you?

•Explain how you could use the Production Possibility Model to represent the US Economy during the Corona Virus pandemic.