The table below shows the Production possibilities for an economy Production Alternatives Capital Goods A B C D E 0 2 6 i. Unattainable 'F' ii. Attainable and inefficient 'G' iii. Attainable and efficient. 'H' 8 Consumer Goods 40 36 28 16 0 A. Draw the production possibility curve for the economy, using the above data, with consumer goods being on the vertical axis and capital goods on the horizontal axis. B. What is the opportunity cost of moving from C to D in terms of Consumer goods? C. On the Production Possibilities curve. Mark three points on the graph using the letters given: D. Suppose additional labour who were only skilled in the making of capital goods were introduced, thereby causing output of capital goods to increase by 50%. Draw the new graph on the same graph paper as (a) above.

The table below shows the Production possibilities for an economy Production Alternatives Capital Goods A B C D E 0 2 6 i. Unattainable 'F' ii. Attainable and inefficient 'G' iii. Attainable and efficient. 'H' 8 Consumer Goods 40 36 28 16 0 A. Draw the production possibility curve for the economy, using the above data, with consumer goods being on the vertical axis and capital goods on the horizontal axis. B. What is the opportunity cost of moving from C to D in terms of Consumer goods? C. On the Production Possibilities curve. Mark three points on the graph using the letters given: D. Suppose additional labour who were only skilled in the making of capital goods were introduced, thereby causing output of capital goods to increase by 50%. Draw the new graph on the same graph paper as (a) above.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter3: Scarcity, Trade-offs, And Production Possibilities

Section: Chapter Questions

Problem 6P

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