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Country Leagsville can only produce Steel and Food with the given amount of resources and technology. The Production Possibilities are given below: Combination Steel (Tonnes)
Country Leagsville can only produce Steel and Food with the given amount of resources and technology. The Production Possibilities are given below:
Combination | Steel (Tonnes) | Food (Tonnes) |
A | 0 | 100 |
B | 25 | 90 |
C | 50 | 70 |
D | 75 | 40 |
E | 100 | 0 |
- Draw the Production Possibilities Curve?
- Calculate the Opportunity Cost of moving from Combination C to D
- How does this illustrate Increasing Opportunity Cost?
Suppose the 'Economic Growth' allows us to produce more goods, so that the new production possibilities for Steel and Food are as follows:
Combination | Steel (Tonnes) | Food (Tonnes) |
A | 0 | 100 |
B | 25 | 90 |
C | 50 | 70 |
D | 75 | 60 |
E | 100 | 40 |
F | 125 | 0 |
- Draw the new Production Possibilities Curve, and describe how the New Curve is related to the Old curve.
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