Answer the Questions

Question 1 Suppose a British Columbia has a total of 12 units of labour, which can be used to produce either computer or wheat. One computer takes 6 units of labour to produce and 106 kg wheat takes 2 units of labour to produce. (a) Explain why scarcity exists in this economy. Use the data as evidence of your reasoning. (b) What is the maximum quantity of computers that can be produced? (c) What is the maximum quantity of wheat than can be produced? (d) Draw the BC's production possibility curve. (@) What is the opportunity cost of computers in BC? (f) Explain why BC can't produce both 3 computers and 400 kg of wheat. (g) Explain why the BC shouldn't produce both 1 computer and 200 kg of wheat. Question 2 Use the relevant information below: Inventory investment $ 50 billion Fixed investment 120 billion Consumer durables 420 billion Consumer nondurables 275 billion Interest 140 billion Indirect business taxes 45 billion Government wages and salaries 300 billion Government purchases of goods and 110 billion services Imports 80 billion Exports 40 billion Consumer semi-durables 185 billion Profits 320 billion Consumer services 600 billion 1. Calculate Consumption, Investment, Government spending 2. Explain the expenditure method of calculating the GDP. How this method is different from the income method of calculating the GDP? 3. Use suitable method to calculate GDP and show your work