Authors libby rittenberg 888

shall use the production possibilities model to analyze Roadway’s ability to produce goods and services A production possibilities curve illustrates the production choices available to an economy Recall that the production possibilities curve for a particular country is determined by the factors of production and the technology available to it Figure 17.1 "Roadway’s Production Possibilities Curve" shows a production possibilities curve for Roadway We assume that it produces only two goods—trucks and boats Roadway must be operating somewhere on its production possibilities curve or it will be wasting resources or engaging in inefficient production If it were operating inside the curve at a point such as D, then a combination on the curve, such as B, would provide more of both goods (Roadway produces 3,000 more trucks and 3,000 more boats per year at B than at D) At any point inside the curve, Roadway’s production would not be efficient Point E suggests an even higher level of output than points A, B, or C, but because point E lies outside Roadway’s production possibilities curve, it cannot be attained Figure 17.1Roadway’s Production Possibilities Curve Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 888