1. Explain the theory underlying the Production Possibility Frontier/Curve and list the main assumptions. Illustrate with the use of a diagram.

2. Use the PPF framework to illustrate and fully explain the following:

• attainable versus unattainable combinations
• inefficiency
• opportunity cost
• increasing opportunity cost

3. What are the factors that may cause the Production Possibility Frontier to shift.

4. As a result of the COVID-19 pandemic, a "new normal" was forced upon Trinidad and Tobago. The Government of the Republic of Trinidad and Tobago made difficult decisions which were aimed at containing the spread of the virus. Represent the following scenarios on the production possibility curve and provide a descriptive narrative on each position. Please note that the scenarios are fictional in some cases.

1. The Government ordered non-essential employees to stay at home
2. Resources were used to produce additional personal protective equipment (PPE).
3. The Government stated that Trinidad and Tobago will produce a vaccine for COVID-19.
4. Five thousand employees died as a result of the virus.
5. Every month, the Government decided to continue moving more resources away from the current production of security goods and services to the production of health care goods and services.
6. New and improved technology was finally installed to enhance the production of only healthcare goods and services.

HINT: Assume that goods and services required to treat Covid-19 are Public Goods.