Question
4. (a) Draw a production possibilities frontier representing the economy's possible production of milk and eggs. Now, show what will happen to the frontier or
4. (a) Draw a production possibilities frontier representing the economy's possible production of milk and eggs. Now, show what will happen to the frontier or the production point under each of the following circumstances in parts (b) to (e). Use a separate graph to illustrate each situation. For parts (c), (d), and (e), show your answers relative to the original production possibilities frontier. (2 marks) (b) The outcome for the economy is efficient, with society choosing approximately equal amounts of milk and eggs. (2 marks) (c) A recession causes a significant percentage of the labour force to become unemployed. (2 marks) (d) Some cows are found to be infected with Mad Cow Disease, and about one-third of the cows must be destroyed. (2 marks) (e) Improvements in animal nutrition raise the general productivity of cows and chickens. (2 marks)
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