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Suppose Spain produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for barley, an agricultural good, and
Suppose Spain produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for barley, an agricultural good, and construction vehicles, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a long drought that reduces the amount of water available for farmers to use for irrigation. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoinls 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. 300 CR 250 PPF 200 150 100 CONSTRUCTION VEHICLES (Thousands) 50 F'PF 0 30 160 240 320 400 430 BARLEY (Millions of bushels)
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