Question 1:

4. Shifts in production possibilities Suppose the United Kingdom produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for alfalfa, an agricultural good, and locomotives, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a breakout of avian flu that sickens millions of workers. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. 180 150 PPF 120 LOCOMOTIVES (Thousands) 80 30 PPP 70 140 210 280 350 420 ALFALFA (Millions of bushels)5. Opportunity cost and production possibilities Kate is a skilled toy maker who is able to produce both trains and drums. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time. Hours Producing Produced Choice (Trains) (Drums) (Trains) ( Drums) A 10 14 mon 17 ON 18 On the following graph, use the blue points (circle symbol) to plot Kate's initial production possibilities frontier (PFF). (?) 30 O 25 Initial PPF 21 New PPF DRUMS 10 TRAINSSuppose Kate is currently using combination D, producing one train per day. Her opportunity cost of producing a second train per day is per day. Now, suppose Kate is currently using combination C, producing two trains per day. Her opportunity cost of producing a third train per day is per day. From the previous analysis, you can determine that as Kate increases her production of trains, her opportunity cost of producing one more train Suppose Kate buys a new tool that enables her to produce twice as many trains per hour as before, but it doesn't affect her ability to produce drums. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more trains per hour, Kate's opportunity cost of producing drums is it was previously