The figure below shows a society's Production Possibilities Frontier for production of corn and wheat. Answer the questions below, referring to this figure.

a. What is the maximum quantity of corn that can be produced, if the society produces no wheat?

b. If the society produces 15 units of wheat, what is the maximum quantity of corn it can produce?

c. Does point A represent an efficient use of resources? Explain.

d. Which point on the graph represents a combination of outputs that is unattainable? Explain, referring to specific quantities of corn and wheat in your explanation.

e. Find a point on the graph that illustrates an inefficient use of resources. Explain why there is inefficiency, referring to specific quantities of corn and wheat in your explanation.

f. Suppose the society moves from (efficiently) producing only wheat to producing both wheat and 40 units of corn. What is the opportunity cost of producing these first 40 units of corn?

g. Suppose the society moves from (efficiently) producing 40 units of corn to producing 80 units of corn. What is the opportunity cost of producing these last 40 units of corn?

h. Comparing your answer to part (g) to your answer in part (f), what point about the use of resources for different kinds of production is illustrated? That is, why does the opportunity cost change?

i. Would producing at point D be the best choice for this society? Explain your answer.

Transcribed Image Text:

Quantity of Corn 90 80 70 60 50 40 30 20 10 0 A 0 5 B E D PPF F 10 15 20 25 Quantity of Wheat Quantity of Corn 90 80 70 60 50 40 30 20 10 0 A 0 5 B E D PPF F 10 15 20 25 Quantity of Wheat

Answer rating: 100% (QA)

a 80 units of corn 1 circle b 60 units of corn 1 circle c Yes point A is efficient All points that l... View the full answer