PBSEDSOCSTU009 (MACRO ECONOMICS)

Long-Run Consequences of Stabilization Policies, and Open Economy:

International Trade and Finance

Task 1

Write a comprehensive explanation of the Production Possibility Curve below. Encode in

your answer in a word document then convert it to pdf file before submitting it.

The Production Possibility Curve above shows the relationship between the productions of
which two items. This model used to show the tradeoffs associated with allocating resources
between the productions of the two goods- consumption and capital goods. The graph is
used to show alternative ways to use an economies resources. Thus, using resources in such
a way as to maximize the production of goods and services

Prepared by: Shayne Antonette Matic, LPT

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
1
 PBSEDSOCSTU009 (MACRO ECONOMICS)
Long-Run Consequences of Stabilization Policies, and Open Economy:
International Trade and Finance

The economy has to sacrifice some production of one commodity in order to increase the
production of another commodity. If an economy keeps increasing its capital
stock/number of workers/technology/natural resources, then over time its production
possibilities curve will: shift to the right.

On the other hand, if a point arise outside the production possibilities curve represents a
combination of goods that is unattainable.

Finally, production possibility curve can illustrate the concepts of scarcity, opportunity cost,
efficiency, inefficiency, economic growth, and contractions.

Review the rubric below for you to be guided in accomplishing the preceding activity.

CRITERIA 5 points 3 points 1 point

Content Answer is Answer is Content relates
appropriate to the appropriate to the peripherally to the
question. Content is question. Content question; Contains
factually correct. may have one or significant factual
two factual errors. errors.
Development Develops each Each point Sparse details or
point with may supported with evidence. Question
specific details. some details and only partially
Answers question evidence. All answered.
completely. important points
included.

Prepared by: Shayne Antonette Matic, LPT

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
2
 PBSEDSOCSTU009 (MACRO ECONOMICS)
Long-Run Consequences of Stabilization Policies, and Open Economy:
International Trade and Finance

Use of Language Uses technical or Accurate word Ordinary word

scientific choice. No more choice; use of
terminology than 2 major errors scientific
appropriately and and a few minor terminology
correctly. No major errors. avoided. Some
grammatical or serious errors.
spelling errors.
Self-made rubric

Prepared by: Shayne Antonette Matic, LPT

THIS MODULE IS FOR THE EXCLUSIVE USE OF THE UNIVERSITY OF LA SALETTE, INC. ANY FORM OF REPRODUCTION, DISTRIBUTION,
UPLOADING, OR POSTING ONLINE IN ANY FORM OR BY ANY MEANS WITHOUT THE WRITTEN PERMISSION OF THE UNIVERSITY IS
STRICTLY PROHIBITED.
3