Answer Three Questions

Question 1The convex require of the outpution chance consign of accumulation is derived from the principle of opportunity cost . The business possibility bank defines the maximum production potential of an deliverance given its preference and technology constraints . The opportunity cost is defined as detriment of economic value that could strike been gained if mental imagerys had been invested in an alternative . wherefore , the opportunity cost is an integral comp unitarynt of the production possibility terminal point in terms of how much of one product croup be produced given its opportunity costThe convex shape of the production possibility boundary means that as the economy produces more of one groovy , its opportunity cost rises . As a result , fewer quantities of that goodly can be produced . In other wor ds more of the other good have to be sacrificed .

This is because , as a result of creation set by resource and technology constraints , the economy is in the optimum position of producing a sealed quantity of individually form of goods . Beyond that point , the opportunity cost of producing one good instead of another continues to rise as it requires increase resource and technology investmentsQuestion 2According to the law of diminishing returns , the productivity of each additive arousal continues to rise up to a circumstantial point after which it starts to decline . As demonstrated in the circuit card o n the right , each additional input of fag ! out continues to increase the marginal utility up to a certain point beyond which the marginal utility goes great cross again regardless of...If you want to get a dear essay, order it on our website: OrderCustomPaper.com

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