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Shangri-La produces only two goods: bats and balls. Each worker comes with a fixed quantity of material and capital, and the economy's labour force
Shangri-La produces only two goods: bats and balls. Each worker comes with a fixed quantity of material and capital, and the economy's labour force is fixed at 50 workers. Table 1.18 indicates the amounts of bats and balls that can be produced daily with various quantities of labour. TABLE 1.18 Number of Workers Daily Production of Balls Number of Workers Daily Production of Bats 0 0 0 0 10 150 10 20 20 250 20 36 30 325 30 46 40 375 40 52 50 400 50 55 a) Complete the first two rows of the production possibilities in Table 1.19. TABLE 1.19 Balls Bats Bats 2 A B C D E 0 0 0 b) What is the opportunity cost of increasing the output of bats from 46 to 52 units per day? c) Suppose that a central planning office dictates an output of 250 balls and 61 bats per day. Is this output combination possible? d) Now, assume that a new technology is introduced in the production of bats so that each worker can produce half a bat more per day. Complete the Bats 2 row in Table 1.19. e) Can the planning office's goal of 250 balls and 61 bats now be met?
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