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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
  1. Can this country produce 24 units of butter and 4 missiles? Explain. Where would this point lie relative to the PPF?
  2. 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?
  3. What is the opportunity cost of increasing butter production from 18 - 24 units?
  4. What is the maximum amount of butter that can be produced, if all resources are devoted to butter production?
  5. 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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