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Draw a production possibilities frontier (PPF) with missiles on the horizontal axis and butter on the vertical axis, illustrating these options, showing points A -
Draw a production possibilities frontier (PPF) with missiles on the horizontal axis and butter on the vertical axis, illustrating these options, showing points A - F.
Option | missiles | butter |
A | 0 | 30 |
B | 1 | 28 |
C | 2 | 24 |
D | 3 | 18 |
E | 4 | 10 |
F | 5 | 0 |
- Can this country produce 24 units of butter and 4 missiles? Explain. Where would this point lie relative to the PPF?
- What is the trade-off when moving from point A to B? What is the opportunity cost of increasing missile production from 3 - 4 units?
- What is the opportunity cost of increasing butter production from 18 - 24 units?
- What is the maximum amount of butter that can be produced, if all resources are devoted to butter production?
- Can this country produce 2 missiles and 10 units of butter? Yes or no? Where would this point lie relative to the PPF?
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