Explain how the following events influence U.S. production possibilities:

• Some retail workers are re­employed building dams and wind farms.

• More people take early retirement.

• Drought devastates California’s economy.

Use the following information to work Problems 7 and 8.

Figures 1 and 2 show Tom’s and Abby’s production possibilities. Tom uses all his resources and produces 2 rackets and 20 balls an hour. Abby uses all her resources and produces 2 rackets and 40 balls an hour.