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4. Refer to the production possibilities table below. {4 points] Combination Forklifts Automobiles A 30 U B 27' 2 C 21 4 D 12 6
4. Refer to the production possibilities table below. {4 points] Combination Forklifts Automobiles A 30 U B 27' 2 C 21 4 D 12 6 E U 8 a. If the economy is currently operating at point C and producing 21 Forklifts and 4 Automobiles and moves from point C to point D: I What is the cost of producing 2 automobiles more? I What is the cost of producing one automobile more? Show the cost calculation. b. If the economy is currently operating at point D and producing 12 Forklifts and 6 Automobiles and moves from point D to point E: i What is the cost of producing 2 automobiles more? a What is the cost of producing one automobile more? Show the cost calculation. c. Refer to your answers to question a and b. Is the cost of producing one automobile more increasing or stays the same? Why? 1'. Refer to your answer above, is the PPF from above a straight line or bowed out PPF? Why? g. If the economy were currently producing only 3 automobiles and 20 forklifts, what could you conclude about its use of available resources? j. h. It the economy were currently producing 4 automobiles and 21 forklifts, what could you conclude about its use of available resources? Is a production at a point outside of the PPF currently possible? Could a future advance in technology allow production beyond the current PPF
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