1.Below is the production possibilities table for the country of Lavaland.(6 marks)

% Resources devoted to production of tanks

Number of tanks

% resources devoted to production of pizza

Number of pizzas

Row

0

0

100

15

A

20

4

80

14

B

40

7

60

12

C

60

9

40

9

D

80

11

20

5

E

100

12

0

0

F

Instructions:

a)

Use the information in the Table to draw the production possibilities curve (PP1) for Lavaland.Put tanks on the horizontal axis.

PP1 for Lavaland

16

14

12

10

8

6

4

2

0

2

4

6

8

10

12

14

16

b)

What is the cost to Lavaland of moving from Point A to Point B on its PP1

c)What is the cost to Lavaland of moving from Point E to Point F?

Tanks

d)What general economic principle is being illustrated by your answer to part b and c?Explain