1. The graph depicts the production possibilities of the nation Metalland. Metalland produces two goods, silver and gold, and consumers prefer more of each metal. The table describes production of each metal, in thousands of tons, for each point: Point Silver output Gold output A: 21 B: 36 С: 24 15 D: 12 9. E: 42 21 Gold EO В Silver a. Suppose the economy is at point A. What is the opportunity cost of 24,000 tons of silver? Explain your answer. b. Suppose the economy is at point D. What is the opportunity cost of 12,000 tons of silver? Explain your answer. c. Chair of the Council of Economic Advisors of Metalland: “Point E is a production efficient point. It has more of both metals than any other point." Evaluate.

1. The graph depicts the production possibilities of the nation Metalland. Metalland produces two goods, silver and gold, and consumers prefer more of each metal. The table describes production of each metal, in thousands of tons, for each point: Point Silver output Gold output A: 21 B: 36 С: 24 15 D: 12 9. E: 42 21 Gold EO В Silver a. Suppose the economy is at point A. What is the opportunity cost of 24,000 tons of silver? Explain your answer. b. Suppose the economy is at point D. What is the opportunity cost of 12,000 tons of silver? Explain your answer. c. Chair of the Council of Economic Advisors of Metalland: “Point E is a production efficient point. It has more of both metals than any other point." Evaluate.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 8PA

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