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Leisureland Research Paper

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Leisureland
This paper explores the economic concepts of the production possibilities curve, opportunity cost, and comparative advantage. The Western and Eastern regions of a fictitious nation called “Leisureland” are used as the framework to examine these topics and answer five Unit #1 assignment questions at the end of the paper. Table 1 shows Leaisureland’s monthly production capacity to produce bicycles and/or bowling balls:
Table 1: Leisureland regional production capacity per month

Production Possibilities Curve
A production possibilities curve is an economics model that graphically displays the production potential for a pair of goods. Different production combinations, such as those in Table 1 can be plotted along an XY axis, beginning …show more content…

[(4) = (-200/50)] C) A flatter production possibility curve denotes lower opportunity costs. The Western region has the comparative advantage to produce bowling balls. For each ball produced, their opportunity cost is one-quarter (.25) of one bicycle, versus the Eastern region’s opportunity cost of four bicycles. The Eastern region has the comparative advantage to produce bicycles with the opportunity cost of one-quarter (.25) of one bowling ball for each bike produced. This flatter production possibility curve can be visualized by reversing the data used above in the Eastern region table: D) If the Eastern region produced all 400 of the bicycles, the Western region could produce 400 bowling balls. If the Western region produced 100 bicycles, the Eastern region could produce the remaining 300 bikes, plus 25 bowling balls.
E) All 400 of the bicycles could be produced in the Eastern region, or the Western region could produce 100 bicycles, leaving the remaining 300 to be produced in the Eastern Region, or some other combination where the Western region produces from one to 99 bicycles and the Eastern region produces the

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