Consider an economy that produces only two goods: Food and Clothing. The use of the resources of this economy produces monthly according to the table below: Alternative  Clothes Foods A 0 9 B 3 7 C 5 4 D 6 two D 7 0    Ask if: a) Graph the production possibility curve of this economy b) Considering the same factor endowment in this economy, how would it be possible to increase the production of goods? c) Comment on the fact that this economy is actually producing 3 units of clothing and 5 of food

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter1: The Economic Approach
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Problem 1CQ
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Consider an economy that produces only two goods: Food and Clothing. The use of the resources of this economy produces monthly according to the table below:

Alternative  Clothes

Foods

A 0

9

B 3 7
C 5 4
D 6 two
D 7 0

 

 Ask if:

a) Graph the production possibility curve of this economy

b) Considering the same factor endowment in this economy, how would it be possible to increase the production of goods?

c) Comment on the fact that this economy is actually producing 3 units of clothing and 5 of food

d) Indicate the opportunity cost of situations A and C

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