Instructions: Consider an economy than only produces two goods - Strawberries and Computers. Step 1: Draw a

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Question:

Instructions: Consider an economy than only produces two goods - Strawberries and Computers.

Step 1: Draw a production possibilities frontier (PPF) for this economy. Label strawberries on the vertical axis and computers on the horizontal axis. Label one point that is "efficient", one point that is "inefficient", and one point that is "unattainable".

Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of computers only. (Hint: The intercept for strawberries will not change.) Clearly label the new PPF.

Step 3. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a drought that destroyed the strawberry harvest. (Hint: The intercept for computers will not change.) Clearly label the new PPF.

Step 4: Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a wave of immigration to the economy in which the workers were equally capable of working in computer production or strawberry production. (Hint: Both intercepts will change.) Clearly labeled the new PPF.

You will have a total of 4 graphs in total. No numbers are necessary on any of the 4 graphs. I know that you know the number scale (zero to infinity from the origin going right along the horizontal axis and zero to infinity from the origin going up vertical axis), so it is not necessary to include any numbers on your graphs.