1. The table below is a list of the maximum combinations of rice and beans that the Island of Utopia can produce. combination rice beans A 1200 0 B 1100 1200 C 900 2000 D 500 2600 E 200 2900 F 0 3000 (i) Draw the production possibility frontier (PPF) for the Island of Utopia I (ii) Explain what a point on the line shows (for example point A or B, etc). Full answer required. ii) Assume the economy starts at point D and moves to point B. Explain what is happening here. Calculate the opportunity cost.

1. The table below is a list of the maximum combinations of rice and beans that the Island of Utopia can produce. combination rice beans A 1200 0 B 1100 1200 C 900 2000 D 500 2600 E 200 2900 F 0 3000 (i) Draw the production possibility frontier (PPF) for the Island of Utopia I (ii) Explain what a point on the line shows (for example point A or B, etc). Full answer required. ii) Assume the economy starts at point D and moves to point B. Explain what is happening here. Calculate the opportunity cost.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 3CQQ

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What does a production possibilities frontier illustrate?
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A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
Imagine a country XYZ that produces only two goods—chairs and tables. Together, the chairs and tablesindustries use all of the economy’s factors of production. The table below shows the productionpossibilities for XYZ:Production Possibilities for XYZChairs Tables600 0450 150300 250150 325 0 375a. Draw a Production Possibility Frontier for the country using the information in tableabove. b. What is the opportunity cost of increasing chairs production from 450 chairs to 600chairs?c. What is the opportunity cost of increasing tables production from 250 tables to 325tables?d. Plot the point denoting 300 chairs and 300 tables on your graph above. Is this point“feasible”? Why or why not?e. Plot the point denoting 300 chairs and 50 tables on your graph above. Should XYZ beproducing at this point? Why or why not?