Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. Evaluate the allocation of resources of this country based on the following points. • Reason for the scarcity that exists in this economy. Use the data as evidence of your reasoning. • Maximum quantity of guns that can be produced. • Maximum quantity of butter than can be produced. • Diagram which represents the nation’s production possibility curve. • Opportunity cost of guns in this nation • Reason why the nation can’t produce both 3 guns and 4 butters. • Reason why the nation shouldn’t produce both 1 gun and 2 butters.

Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. Evaluate the allocation of resources of this country based on the following points. • Reason for the scarcity that exists in this economy. Use the data as evidence of your reasoning. • Maximum quantity of guns that can be produced. • Maximum quantity of butter than can be produced. • Diagram which represents the nation’s production possibility curve. • Opportunity cost of guns in this nation • Reason why the nation can’t produce both 3 guns and 4 butters. • Reason why the nation shouldn’t produce both 1 gun and 2 butters.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter19: Using Economics To Understand The World Around You

Section: Chapter Questions

Problem 10E

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