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Why does a production possibilities frontier with increasing opportunity costs have a bowed-out shape?
The curve is bowed-out because some resources are better suited for the production of one good (e.g. butter) rather than the other (e.g. guns). And as we try to produce more and more of the other good (e.g. guns), it takes enhancing amounts of resources to do so and therefore we incur increasing opportunity costs.
Aggregate supply and the AS curve The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the s
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what would be effect of fiscal and monetry policy on price and output level if meges are flexible and rigied?
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Do you agee or disagree " Economic theory helps society reach economic goals that it has selected for itself?" Justify your answer.
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