Bill can produce either tables or chairs. Bill can work up to 10 hours a day. His production possibilities are given in the table below:

Tables Chairs

0 100

10 80

20 60

30 40

40 20

50 0

1)Construct the production possibilities frontier (PPF) for Bill. Put tables on the Horizontal axis and chairs on the vertical axis.

2)What is Bill's opportunity cost of producing one additional table?

3)What is Bill's opportunity cost of producing one additional chair?

4)Currently Bill is producing 20 tables and 40 chairs.

a)Is this allocation of resources efficient? Why?

b)Show this allocation on the graph and advise Bill how he can be more efficient.