Question: please answer this Question 4: 5 marks Consider a simple economy of Korea - producing two goods, Motor bike and milk. The details of the

please answer this

please answer this Question 4: 5 marks Consider a simple economy of

Question 4: 5 marks Consider a simple economy of Korea - producing two goods, Motor bike and milk. The details of the economy and its production is as follows: Motor Bike (1000 / year) Milk (1000 gallons per year) 0 60 50 30 3 0 a) Make a graph of Korean economy's production possibility frontier. b) Explain this logic, why this PPF curve is always downward sloping. c) Suppose this economy is producing 2000 motor bikes and 30,000 gallons of milk. What is the opportunity cost of producing additional 20,000 gallons of milk? d) According to the (BGH) technology, farmers can now get double the amount of milk from cows easily. In terms of PPF, this means Korean economy can now produce twice milk at each level of bike output. With the current production of 2000 motor bikes, Mr. B claims that this new technology can allow this economy to produce more milk and more bikes. Do you agree with this statement or not? e) Explain carefully, with the help of diagram and justify your

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!