Question
A) Draw the production possibilities frontier on a scale diagram, with the production of X on the horizontal axis and the production of Y on
A) Draw the production possibilities frontier on a scale diagram, with the production of X on the horizontal axis and the production of Y on the vertical axis.
Annual Production of X | Annual Production of Y |
0 | 1300 |
20 | 1200 |
45 | 900 |
60 | 600 |
70 | 350 |
75 | 0 |
B) If the economy is producing 60 units of X and 600 units of Y, what is the opportunity cost of producing an extra 10 units of X. Show on graph.
C) If the economy is producing 70 units of X and 350 units of Y, what is the opportunity cost of producing an extra 5 units of X. Show on graph.
D) If the economy is producing 20 units of X and 800 units of Y, what is the opportunity cost of producing an extra 10 units of X. Show on graph.
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