Wk2 econ Essay Example | Topics and Well Written Essays - 750 words

Wk2 econ - Essay Example The slope is usually concave from the origin, which means, that opportunity costs increase with increasing production of a good. In the example above the Production Possibility Frontier is a straight line, which represents constant opportunity costs for different combination of goods production (Mankiw, 2011). Trade plays important role in reducing poverty in developing countries and increasing their growth rates. According to European Commission trade gives the following advantages to the developing countries: it increases commercial opportunities of a country; contributes to improvement of value chain of a product, which makes it more competitive; promotes innovations in the country; increases investments into the country; expands export of local producers to other countries; generates employment opportunities; influences exchange of experience and strengthens economic and social ties between developing and developed countries (European Commission,