ECONOMICS PAPER 3 DONE! :D :D

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Lesley anne

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Errm why do sole proprietors have low average costs
But High average costs is it because they can't take advantage of
economies of scale
 
uzair shahid

uzair shahid

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Lesley anne said:
Errm why do sole proprietors have low average costs
But High average costs is it because they can't take advantage of
economies of scale
Click to expand...

fixed costs and variable costs of sole traders are low
therefore totals costs low.
total output is low therefore high average costs.
 
ZainManutd

ZainManutd

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Ali hussain-97 said:
I wrote that the production curve was inside and most of my friends did the same so I guess it's the right answer
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It was inside,i'm sure,because they were not using there resources(oil in this case) efficiently,so the PFF curve will be inside,if they were being more productive only then will the PFF curve for Iran's oil be on the curve.
 
Cecile Lapone

Cecile Lapone

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Are you guys talking about 31? Because in 31, I said that Iran produces ON their PPF, since in the extract it said "In 2011, Iran were importing more of their oil, since they lacked the ability to increase production of oil." This suggests that they are ON the PPF, since this is the concept of SCARCITY, not INEFFICIENCY!
 
ZainManutd

ZainManutd

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Cecile Lapone said:
Are you guys talking about 31? Because in 31, I said that Iran produces ON their PPF, since in the extract it said "In 2011, Iran were importing more of their oil, since they lacked the ability to increase production of oil." This suggests that they are ON the PPF, since this is the concept of SCARCITY, not INEFFICIENCY!
Click to expand...


No,no they lacked the ability to produce more oil they had the reserves but they weren't productive enough,.hence,they had the resources but couldn't use them productively,as a result they will be under the PFF curve.
 
ZainManutd

ZainManutd

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Cecile Lapone said:
Are you guys talking about 31? Because in 31, I said that Iran produces ON their PPF, since in the extract it said "In 2011, Iran were importing more of their oil, since they lacked the ability to increase production of oil." This suggests that they are ON the PPF, since this is the concept of SCARCITY, not INEFFICIENCY!
Click to expand...


A. Production Possibility Frontier (PPF)
Under the field of macroeconomics, the production possibility frontier (PPF) represents the point at which an economy is most efficiently producing its goods and services and, therefore, allocating its resources in the best way possible. If the economy is not producing the quantities indicated by the PPF, resources are being managed inefficiently and the production of society will dwindle. The production possibility frontier shows there are limits to production, so an economy, to achieve efficiency, must decide what combination of goods and services can be produced.
http://www.investopedia.com/university/economics/economics2.asp
 
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