Question 6

Case 2: Japan (Production Possibility Frontier)

Japan has 50,000 hours of labor available for production, per month

• • Producing one computer requires 125 hours of labor
  • Producing one ton of wheat requires 25 hours of labor

Use the information above and determine how many computers Japan will produce if it uses all the resources (50,000 hours of labor) to produce computer only.

Question 7

Case 2: Japan (Production Possibility Frontier)

Japan has 50,000 hours of labor available for production, per month

• • Producing one computer requires 125 hours of labor
  • Producing one ton of wheat requires 25 hours of labor

If Japan decides to produce only tons of wheat, how many tons of wheat can he produce if the economy uses fully its resources (i.e 50,000 hours of labor)?

8.) Now suppose Japan uses half its labor to produce computers and the remaining half to produce wheat; then how many computers will it produce?

9.) Suppose Japan uses half its labor to produce computers and the remaining half to produce wheat; then how many tons of wheat will it produce?

QUESTION 10

Using the answers to questions 6, 7, 8 and 9, draw the Production possibility curve of Japan.

Name the points corresponding to your answers to questions #6 and #7, respectively D and E.

Plot and name the point F, corresponding to the numbers of computers and wheat from your answers to questions #8 and #9 on the graph representing Japan's PPC.