Short Answer Problems

1. Plot the production possibilities curve from the data in the following table.

Alternatives

A

B

C

D

E

F

Capital goods

100

95

85

70

50

0

Consumer goods

0

100

180

240

280

300

Label on the graph the attainable(A) and unattainable(U) area.

a. What are the points on the PPC represent? _____________________

b. At point C, the opportunity cost of 60 more units of consumer goods is ____________

At point E, the opportunity cost of 20 more units of capital goods is _______________

c. Comparing point B and E, which tends to promote a faster rate of economic growth? Why?

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