2. With reference to economic perspective, answer the following questions. (a) What are the two fundamental...

Transcribed Image Text:

2. With reference to economic perspective, answer the following questions. (a) What are the two fundamental economizing problems that affect an agricultural sector of a developing country like Malawi? (b) What two conditions must be satisfied in order to make best use of a country's scarce agricultural resources? (c) Table 1 presents production possibilities of maize and tractors in Malawi's economy. Study the table and answer the questions that follow. Table 1. Production possibilities of maize and tractors Production Alternatives Type of product Maize (in metric tons) Tractors (in thousands (i) What is the marginal opportunity cost of fourth unit of maize? A 0 14 B 2 12 с 4 9 D 6 5 EBO 8 0 [2 (ii) What is the total opportunity cost of 12 units of tractors? [2 marks] (iii) Indicate TRUE or FALSE and explain your answer briefly: If the data in Table 1 is plotted on a graph, all points on the resultant production possibilities frontier would necessarily represent an allocative efficiency. [2 marks] 2. With reference to economic perspective, answer the following questions. (a) What are the two fundamental economizing problems that affect an agricultural sector of a developing country like Malawi? (b) What two conditions must be satisfied in order to make best use of a country's scarce agricultural resources? (c) Table 1 presents production possibilities of maize and tractors in Malawi's economy. Study the table and answer the questions that follow. Table 1. Production possibilities of maize and tractors Production Alternatives Type of product Maize (in metric tons) Tractors (in thousands (i) What is the marginal opportunity cost of fourth unit of maize? A 0 14 B 2 12 с 4 9 D 6 5 EBO 8 0 [2 (ii) What is the total opportunity cost of 12 units of tractors? [2 marks] (iii) Indicate TRUE or FALSE and explain your answer briefly: If the data in Table 1 is plotted on a graph, all points on the resultant production possibilities frontier would necessarily represent an allocative efficiency. [2 marks]